Pensions and Retirement Planning

For many of our high net worth clients, one of the most important goals on their journey to financial freedom is the accumulation of a substantial pension fund. We ensure that our clients make use of all available tax allowances, and employ a blend of strategies designed to ensure that when they choose to retire they have built up substantial assets. In retirement, our focus is on the tax-efficient release of income.

Creating a pensions strategy that works for you

Whilst retirement planning has become increasingly complicated for high net worth individuals, we create specific wealth management strategies that match your individual aims, objectives and circumstances, that utilises not only a range of pension structures, but also makes use of other tax allowances such as building an ISA portfolio and general investment account which can accumulate over a period and is subject to the more advantageous capital gains tax regime. For those with a higher risk appetite, then investment vehicles such as Enterprise Investment Schemes, Seed Enterprise Investment Schemes and Venture Capital Trusts can be effectively deployed. Our independence means we have access to the whole of market to find the best solutions for your needs.

If you are self-employed, in a partnership, a company director, business owner or executive, we can advise you on a wide range of pension arrangements, including Self-Invested Personal Pensions (SIPPs) and Small Self-Administered Schemes (SSASs). As part of our holistic approach to your finances, we will also advise you on income drawdown, cashflow management and Inheritance Tax planning.

Download our Retirement Wellbeing guide

Retiring from 55

Back in April 2015, the government introduced some of the most significant and far-reaching changes to pension legislation in almost a century. Launched under the banner of ‘Freedom & Choice’, this raft of measures brought greater flexibility and choice to individuals and their families. We help clients ensure that financial freedom is reached as early as possible, meaning that the choice to work is often based on intellectual or entrepreneurial passion.

The Chancellor made some significant changes to pensions during the Spring Budget 2023, many of which took effect from 6 April 2023:

The Lifetime Allowance (LTA) charge was removed, with the LTA (currently £1,073,100) expected to be formally abolished (likely to be April 2024)
The standard Annual Allowance increased from £40,000 to £60,000, allowing individuals to pay more into their pension each tax year and receive tax relief on it. Individuals are still able to carry forward any unutilised allowance from the previous three tax years

The ‘adjusted income’ threshold for Annual Allowance tapering increased from £240,000 to £260,000 and the minimum tapered Annual Allowance increased from £4,000 to £10,000 (meaning that individuals with annual adjusted income of £360,000 or more will have an Annual Allowance of £10,000)
The Money Purchase Annual Allowance (MPAA) increased from £4,000 per tax year to £10,000, to encourage those drawing a pension to continue working.

Pensions provide a tax-efficient way of providing for your future income needs. For example, subject to the limits and thresholds, a top rate tax payer (45%) receives immediate tax relief of 20%, and can claim a further 25% through their tax return. This means that they can make a contribution to their pension of £10,000 which will in effect cost them just £6,000.

Clear considered advice I trust for my future wellbeing

Partner, Magic Circle Law Firm