Question 1

How do I set up a monthly contribution?

Accepted Answer

Follow the video below to set up a monthly contribution!

${youtube}How to set up monthly contributions

Question 2

What happens if I die after age 75?

Accepted Answer

If you die after age 75 the value of your pension can still be passed to your beneficiaries but will be subject to income tax.

Question 3

How much do I pay?

Accepted Answer

The Collegia Personal Pension Scheme charges you 1.7% out of every new contribution to your Collegia Personal Pension.

On an ongoing basis, we charge you 0.1% of your account annually for managing it (Annual Management Charge) and you also are charged 0.29% - or 0.35% for the HSBC Islamic Global Equity Fund - of the value of your assets annually to pay for the costs of the funds. There are no additional fees. And never there will be.

Question 4

What benefits can I take from my pension?

Accepted Answer

You can take both a tax-free lump sum and an income from your pension.

A tax-free lump-sum

You can usually take up to 25% of the value of your pension as a tax-free lump sum, called a pension commencement lump sum.

Income from your pension

You can use the full value of your pension, or the remainder if you take a tax-free lump sum, to either:

* * provide you with an income – called a drawdown pension * purchase an annuity from an insurance company to provide you with a guaranteed income for the rest of your life

With a drawdown pension your money stays invested, and you make withdrawals from it when you need to. There is no minimum, or maximum amount you have to withdraw. You pay income tax on the amount you withdraw, based on the amount of your income together with your other taxable income.

Instead of receiving a drawdown, you can use the remainder of your pension to purchase an annuity from an insurance company. While annuities vary, they generally provide you with a guaranteed income for the rest of your life. The amount of income payable to you will depend on the annuity rate offered by your chosen provider.

Question 5

What is the tax treatment of my pension?

Accepted Answer

Personal pensions have tax advantages to encourage individuals to save for their retirement:

When you contribute

Contributions you make to your pension are normally eligible for basic rate income tax relief. This means that for every £80 you contribute to your pension the government, through its HMRC department, will pay in an additional £20. Higher or additional rate taxpayers can claim back further income tax relief using a Self-Assessment tax return form. No tax relief is available on pension contributions paid by those at or over the age of 75.

While your pension is invested

The investments in your pension will grow free of income tax and can be sold without incurring capital gains tax (CGT).

When you retire

When you retire, you can generally take up to 25% of your pension value as a tax-free lump sum and use the rest to provide an income. The income paid from your pension is subject to income tax. The amount of tax you pay on your income during retirement will depend on the amount of your income together with your other taxable income. Neither Collegia Partners Limited nor Collegia Partners Trustees Limited provide tax advice. It is important to understand the tax implications of pensions and everyone’s circumstances are unique so if you are ever unsure, we strongly suggest you seek advice from an independent financial adviser.

Question 6

Are there limits on the amount I can save into my pension?

Accepted Answer

Yes. You can only get income tax relief on personal contributions up to a certain amount, and there are also annual and lifetime limits on how much you can save into all your pensions.

Tax relief on personal contributions

You can claim income tax relief on personal contributions (i.e. contributions you pay, rather than those paid into your pension by your employer) up to the value of your net relevant earnings during the relevant tax year or your annual allowance whichever is lower. If you don’t have any net relevant earnings, you can still get tax relief on contributions up to £3,600 each year. This value includes the HMRC tax relief. As a consequence, so you can pay in up to £2,880, and HMRC will add £720 giving you a total contribution of £3,600.

Contributions paid directly into your pension by your employer may or may not be paid with income tax being deducted. If they are made under a salary sacrifice arrangement, then they are not eligible for tax relief. Otherwise, the contributions your employer paid into Collegia on your behalf are eligible for income tax relief.

Annual allowance

The government applies a tax charge, called the annual allowance tax charge, if the ‘total contributions’ to your pension savings for a given tax year exceed your annual allowance. Your ‘total contributions’ includes all your personal contributions, any income tax relief from the government and contributions paid by your employer. In the tax year 2020/21 the annual allowance

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