Most people are aware that they must now take responsibility for their future income. Many people do not like to face the fact that they will age and need to face the future. Favourites Finance Ltd can help face the task ahead with a fresh out look. “Pensions” is a coverall term for any scheme that is designed to give you an income in retirement. How schemes achieve this varies, some do it well others don’t. This can be because of successive government intervention, investment returns or misguided expectations.
Why Pensions Anyway?
A registered pension arrangement is designed to provide benefits for members at retirement. In doing this it is recognised by HMR&C and benefits from a special tax status which means that any contribution receives tax relief and that the fund grows in a tax efficient way. No other financial vehicle benefits from this tax treatment in the UK.
In exchange for this tax treatment HMR&C expect to tax the benefits as income with the exception of the tax free lump.
There are a few basic rules with pensions, which boil down to the fact that if you start late in life and only put in the minimum amount you ought not expect a worthwhile result. However see Small Pension Funds.