Pension question
Discussion
My father in law has just turned 60 and is taking 4 pensions, stupidly (IMO anyway) ticking the 'level' box for annuities rather than 'index linked'.
Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
LeoSayer said:
My father in law has just turned 60 and is taking 4 pensions, stupidly (IMO anyway) ticking the 'level' box for annuities rather than 'index linked'.
Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
I'm no expert but I thought if you had already taken a pension (early retired) you couldnt then contribute to another.Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
We had someone who works here who was being paid a pension, and he wanted to join the company scheme, his application was rejected on the grounds he had already early retired.
northandy said:
LeoSayer said:
We had someone who works here who was being paid a pension, and he wanted to join the company scheme, his application was rejected on the grounds he had already early retired.
If he's working he isn't retired. Taking a pension is based on when the scheme allows it...not whether you are still working.Leo,
As has been said, the tax relief is £3600 or the full limit of his UK earnings and the 25% credit is useful.
Is he taking the 4 existing pensions as secured (scheme) pensions, or is there an element of phased withdrawl to them? If he has the luxury of being financially secure at the moment, he might be able to throttle back on some of the existing pension payments, which will then be preserved to provide him with a greater annuity as he gets older. If he is taking pension income which he doesn't really need, is it being clobbered with (for instance) savings tax?
Without being intrusive, he should be thinking about estate planning too, and IHT. And is taking a 5th pension automatically the best option for him?
Regards,
Al.
As has been said, the tax relief is £3600 or the full limit of his UK earnings and the 25% credit is useful.
Is he taking the 4 existing pensions as secured (scheme) pensions, or is there an element of phased withdrawl to them? If he has the luxury of being financially secure at the moment, he might be able to throttle back on some of the existing pension payments, which will then be preserved to provide him with a greater annuity as he gets older. If he is taking pension income which he doesn't really need, is it being clobbered with (for instance) savings tax?
Without being intrusive, he should be thinking about estate planning too, and IHT. And is taking a 5th pension automatically the best option for him?
Regards,
Al.
LeoSayer said:
My father in law has just turned 60 and is taking 4 pensions, stupidly (IMO anyway) ticking the 'level' box for annuities rather than 'index linked'.
Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
Anyway, he is still working part-time and earning around £9,000 a year. His pensions cover his living expenses so I have suggested that he put all of his salary into another pension to get the tax free lump sum and an index linked income when he stops working.
How much of the £9,000 can he get tax relief on, the whole lot?
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