Information for those thinking of retiring, or recently retired

 


Investing in Pensions

One place that is very attractive to save, if you are approaching retirement, or even retired, is in a pension scheme. The reason is the mathematics behind getting tax relief on contributions.
For �78 a standard rate payer gets a pension pot of �100. After age 50, you can cash this in, and draw 25% tax free, and use the rest for an annuity. So you get back �25, leaving �75 for the annuity. So... overall you are out of pocket �53, yet have got yourself �75 to buy an annuity.
For higher-rate payers, the maths are so strong, it is hard to see why anyone in their 50's doesn't prioritise this above ISA's etc. (They are only out of pocket �35 to get the �75 annuity pot).


 

Some useful links:

wotnext advice on Pension Schemes   Choosing a provider and scheme- stakeholder, SIPP, etc.
Should you defer your state pension?   How long you have to live to make this worthwhile
Book on Pensions   Pensions handbook
Pensions Advisory Service   Pensions Advisory Service
PensionCheck web site advice   'Pension Check' Website
Motley Fool advice on pensions   'Motley Fool' on Pensions
The government watchdog on pensions   FSA on Pensions


Click here to access  investing in retirement

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