Advice in an ever changing financial world

Previous blogs have focused on the changes proposed in George Osborne’s recent budget, which have highlighted the importance of properly structured yet flexible financial planning for all. What has had less comments on is that the financial world of investments and pensions will always be evolving (for both good and bad depending on your and HMRC’s perspective), and there are still changes to come. 

 

Pensions and the tax reliefs applicable remain a large part of the focus, and it goes without saying that investors’ plans may be affected by any future change in tax reliefs.  It has been suggested that the current regime is unduly favourable to higher rate taxpayers, who receive relief on pension contributions at their highest marginal rate, but are often able to keep their income withdrawals (in whatever form) within the basic rate band after the 25% tax free cash lump sum is taken. The suggestion (not an official government or HMRC proposal yet)  has been made that relief should be standardised at 30%, which would give 20% taxpayers a 10% extra incentive to save, but at the same time, this could have a significant impact on the plans of 40% and 45% taxpayers.

 

The changes which are taking place, and those yet to come, mean that planning for retirement and drawing income in retirement has become an on-going process rather than a one-off event, and the associated tax planning is now an essential part of everybody’s wealth planning.

 

Duncan Wilson

Private Client Partner

 

Telephone: +44 (0)20 7893 3456

Email:  getintouch [@] broadstoneltd.co.uk