Question 1

How do I opt out from Auto Enrolment?

Accepted Answer

If you want to opt out from your employer's contributions, please follow the steps as outlined in the video below.

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Question 2

How do I set up a monthly contribution?

Accepted Answer

Please follow the video below to set up a recurring monthly contribution.

${youtube}How to set up monthly contributions

Question 3

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.

Collegia does not provide financial/tax advice so if you are unsure please speak with an Independent Financial Advisor.

Question 4

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 2021/22 the annual allowance

Question 5

How do I make a one-off contribution?

Accepted Answer

To make a one-off contribution, please follow the steps on the video below.

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Question 6

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.

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