The Atticus Papers

Bringing clarity to finance

Tuesday 3rd August, 2021

What is a pension? - A guide to the pension and retirement options in the UK

I was recently confronted with this question by one of my clients, who explained that in my articles I frequently assume a level of knowledge amongst my readers that simply isn’t there. I was shocked to hear this and quite frustrated with myself. Here I am, happily making articles and videos about the more complex areas of pensions, investments and Inheritance Tax planning, when it had never occurred to me to put together an article explaining the basics of what pensions actually are, what they do and the options they offer. We do have a free pension guide available under the resources section of our website, but this is largely a users guide to defined contribution pensions, with little focus on the other pension options available, like the State Pension and Defined Benefit Pensions. In order to address this oversight, I have put together this article where I will look at the most commonly asked questions I come across relating to pensions. In the article I will look at the following areas: • What is a pension? • The State Pension • Defined Benefit (Final Salary) Pensions • Defined Contribution (Money Purchase) Pensions When looking at the pensions, I will consider: • What they are • Eligibility • How they work • Your retirement options • What happens to the pension when you die?

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Tuesday 6th July, 2021

How much can I contribute to my pension? - A guide to funding your pension (UK)

How much can you contribute to your pension each year? This is a crucial question, as knowing the answer will put you in a strong position to build your pension pot and take advantage of the fantastic tax reliefs on offer. However, there are also many pitfalls and if you contribute too much to your pension, this can result in an unforeseen Annual Allowance tax charge. It is therefore very important that you have a broad understanding of the rules relating to pension contributions and what your options are. The article below will explain the pension Annual Allowance, pension carry forward principles, The Tapered Annual Allowance for high earners, the Money Purchase Annual Allowance and the impact of exceeding your annual pension allowance. It will also cover how contributions are made and tax relief provided.

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Monday 28th June, 2021

Should I stop paying into my pension if it exceeds the Lifetime Allowance?

"Should I keep paying into my pension if it reaches the Lifetime Allowance" This is a question I am frequently asked by clients who are approaching (or have exceeded) the pension Lifetime Allowance threshold and are concerned that they may trigger a 55% tax charge on their pension. This is a very valid concern, but for many people, the implications of exceeding the Pension Lifetime Allowance are not as horrendous as they may think and there may be far more benefit in continuing to fund their pension. In the article below I will discuss the various options available when the Lifetime Allowance is exceeded. I will also highlight through calculations and examples, circumstances in which it is potentially better to continue funding your pension.

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Friday 25th June, 2021

What happens to my pension when I die? - a guide to pension death benefits (UK)

This video explains what happens to your pension benefits when you die. It highlights who you can leave your pension to, how the pension death benefits are distributed by the pension trustees and how things have changed since pension freedoms were introduced in April 2015. It also explains the tax treatment of the pension death benefits based on whether you die before age 75 or after age 75. Lastly, it highlights how tax beneficial it can be to leave your pension to beneficiaries, while using non-pension assets to fund your retirement.

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Friday 18th June, 2021

Six ways to boost your pension

"How can I increase my pension in the run up to retirement?" This is a question that many of us ask, as retirement looms, quite often no more than three or four years away. This is because our pensions, despite their crucial role in funding potentially a third of our life's expenditure requirements, are often our most neglected assets. They simply sit forgotten in the background, unattended for thirty or forty years, until we suddenly become acutely aware of their importance and how insufficient our provision up to this point has been. Now, there are no quick fixes. Building a pension pot sufficient to provide for your retirement is a long term activity, and you cannot make up for a 30 years of underfunding in 3 years or less. However, there are a few things you can do to improve your position. In the guide below, I explain six of these options that can help to increase your pension pot and retirement income, and ensure that your pension is best positioned to meet your needs.

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If you would like further information, please don’t hesitate to ask us for one of our more complete digital guides to finance.