Retirement
- how can I improve the situation?
How can I improve the situation : Major tax changes to the way pensions can be funded came into law in April 2006. These are known as pension simplification. In the past there were eight different tax regimes governing pension funding, now there is just one. This is in addition to the fact that pension contracts are now much more attractive since the government introduced stakeholder contracts to provide a much lower set of charges and total flexibility of funding and transfers between providers and schemes.
Leaving pension funding until the last few years or months is never ideal but under the new tax regime it is possible to make substantial improvements at the point of retirement. There are now no limits on the amount you can contribute to pensions, except for the lifetime limit of £1.5m currently(this figure will increase over time). There is however a limit to the tax relief you get.
It is now also possible to defer buying an annuity and instead take regular withdrawals from your fund at a level to suit your needs and tax situation.
There are other ways to increase your retirement income, you could release money from your property by moving to one that is less expensive. Maybe there is a piece of land or other asset you could sell.
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