If my pension income is taxed when I retire, why is a pension a good deal?
You can usually take up to 25% of your pension pot tax-free. Depending on your tax rate during your working life and in retirement, you may also end up paying a lower rate of income tax on pension withdrawals than you get in tax relief when paying into your pension. For example, you could pay income tax at the higher rate of 40% while working, but only the basic rate of 20% when retired and living on a smaller income. Plus, investments held in your pension benefit from exemptions from income taxSome readersWhat is the tax treatment of my pension?
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 pFew readersDo I need to do anything to receive my 25% Government pension top up?
You don't need to do anything as your Collegia Pension automatically collects the 25% for you and adds it to your pension.Few readers