3DfinancialplanningPWP WK Apr15 blue
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01737 225989 [email protected]
Pension reforms: What you need to know The scope of the pension freedoms announced in the Budget 2014 surprised retirement savers across the country. We look at what you need to know about these once-in-a-generation reforms:
Freedom in retirement From April 2015, people in deined contribution schemes who are aged 55 or over will be able to access their pension pots in multiple cash lump sums. The irst 25% will be tax-free and the rest will be taxed at your marginal rate. No tax will be charged if you withdraw less than the annual personal allowance. It is important that you speak to a professional adviser about the tax implications of withdrawing lump sums from your pension.
Independent guidance The government has conirmed that it will provide a free and impartial guidance service for those over 55. From April, retirement savers will be able to access independent guidance via telephone or face-to-face meetings. Although it is not possible to book an appointment at the moment,
people are able to register their interest on the Pension Wise website.
The pension ‘death tax’ The Chancellor announced in September 2014 that the 55% tax charge on inherited pensions will be abolished from April 2015. Individuals will instead be able to pass on unused deined contribution pension funds to a chosen beneiciary when they die. The tax treatment will depend on when the owner dies: • If they die before 75: the funds will be transferred taxfree and the beneiciary will pay no tax • If they die after 75: the beneiciary will pay income tax at their marginal rate (although lump sum payments prior to the 6 April 2016 will still be taxed at 45%). The new rules will apply to people who have not touched their pensions, only taken the 25% tax-free lump sum or have used an income drawdown plan to take their pension. We ofer professional retirement advice. Contact us today.
3D Financial Planning is appointed representative of the Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority
www.3dfinancialplanning.co.uk
April 2015 will see the biggest overhaul of the pensions system in generations. We tell you what you need to know ahead of the changes. The government’s new Marriage Allowance will be introduced from 6 April. How can you take advantage? And, we look at research that suggests that many consumers don’t understand the credit rating system.
APRIL 2015
In this month’s Wealth Knowledge newsletter…
Marriage tax break to beneit millions Married couples and civil partners will be eligible for the government’s new Marriage Allowance from 6 April 2015. The allowance will enable a spouse or civil partner to transfer up to £1,060 of their personal allowance to their partner, potentially saving their partner £212 a year. The government estimates that more than 4 million married couples and 15,000 civil partnerships could beneit from the allowance. In order to be eligible: • the person giving the allowance must earn less than £10,600 • the person receiving the allowance must earn between £10,601 and £42,385 • you must be married or in a civil partnership • both of you must have been born after 6 April 1935. Applications have been open since February 2015 and will remain so for the duration of the 2015/16 tax year. One person in a couple must apply online via the government’s website. If successful, HMRC will notify the recipient of the changes to their PAYE tax code. Prime Minister David Cameron said the allowance would give married couples and civil partners “extra support and more inancial security”.
Married Couple’s Allowance
Married Couple’s Allowance rates Tax year
2015/16
2014/15
Maximum amount
£8,355
£8,165
Minimum amount
£3,220
£3,140
Income limit
£27,700
£27,000
Contact us to discuss personal tax planning.
Credit ratings system confuses consumers Two thirds of people who think they have a good credit history have never checked their credit report, according to research by Experian. The survey asked more than 2,000 people about their creditworthiness and found that 71% believe their credit history is excellent. However, 66% of these have never looked at their credit report. The research suggests that many people misunderstand the credit referencing process:
The Married Couple’s Allowance reduces your income tax bill by 10% of your entitled allowance. For the 2015/16 tax year, eligible couples will receive the maximum allowance of £8,355 if they don’t exceed the income limit of £27,700. This would take up to £835.50 of your tax bill.
• 15% are unaware that missing payments can damage their credit rating • 44% don’t know that applying for multiple sources of credit in a short time period can damage their creditworthiness • 24% think that good credit ratings are based on having a good salary • 44% think that their rating will be boosted by only making the minimum repayment. Julie Doleman, managing director of Experian UK and Ireland, said:
The allowance goes down by £1 for every £2 of income over the limit. However, there is a minimum allowance of £322 that all eligible claimants are entitled to irrespective of their income.
“We understand how to properly manage your credit accounts and knowing what lenders look for when reviewing a credit application is the key to building an excellent credit score.
To qualify:
We understand that people can ind the topic confusing, but the good news is that it is possible for everyone to take control.”
If you or your partner were born before 6 April 1935 and therefore don’t qualify for the Marriage Allowance, you may be able to claim the Married Couple’s Allowance instead.
Important Information
• you must be married or in a civil partnership • you must be living with your spouse or partner • one of you must have been born before 6 April 1935.
Pensions eligibility and the way in which tax charges (or tax relief, as appropriate) are applied depend upon individual circumstances and may be subject to change in the future. You can only normally access a pension at age 55. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any
Talk to us about your personal inances.
investment decisions based upon its content. The value of pensions can fall as well as rise and you may not get back the amount you originally invested. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. E & OE.
01737 225989 [email protected]
Pension reforms: What you need to know The scope of the pension freedoms announced in the Budget 2014 surprised retirement savers across the country. We look at what you need to know about these once-in-a-generation reforms:
Freedom in retirement From April 2015, people in deined contribution schemes who are aged 55 or over will be able to access their pension pots in multiple cash lump sums. The irst 25% will be tax-free and the rest will be taxed at your marginal rate. No tax will be charged if you withdraw less than the annual personal allowance. It is important that you speak to a professional adviser about the tax implications of withdrawing lump sums from your pension.
Independent guidance The government has conirmed that it will provide a free and impartial guidance service for those over 55. From April, retirement savers will be able to access independent guidance via telephone or face-to-face meetings. Although it is not possible to book an appointment at the moment,
people are able to register their interest on the Pension Wise website.
The pension ‘death tax’ The Chancellor announced in September 2014 that the 55% tax charge on inherited pensions will be abolished from April 2015. Individuals will instead be able to pass on unused deined contribution pension funds to a chosen beneiciary when they die. The tax treatment will depend on when the owner dies: • If they die before 75: the funds will be transferred taxfree and the beneiciary will pay no tax • If they die after 75: the beneiciary will pay income tax at their marginal rate (although lump sum payments prior to the 6 April 2016 will still be taxed at 45%). The new rules will apply to people who have not touched their pensions, only taken the 25% tax-free lump sum or have used an income drawdown plan to take their pension. We ofer professional retirement advice. Contact us today.
3D Financial Planning is appointed representative of the Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority
www.3dfinancialplanning.co.uk
April 2015 will see the biggest overhaul of the pensions system in generations. We tell you what you need to know ahead of the changes. The government’s new Marriage Allowance will be introduced from 6 April. How can you take advantage? And, we look at research that suggests that many consumers don’t understand the credit rating system.
APRIL 2015
In this month’s Wealth Knowledge newsletter…
Marriage tax break to beneit millions Married couples and civil partners will be eligible for the government’s new Marriage Allowance from 6 April 2015. The allowance will enable a spouse or civil partner to transfer up to £1,060 of their personal allowance to their partner, potentially saving their partner £212 a year. The government estimates that more than 4 million married couples and 15,000 civil partnerships could beneit from the allowance. In order to be eligible: • the person giving the allowance must earn less than £10,600 • the person receiving the allowance must earn between £10,601 and £42,385 • you must be married or in a civil partnership • both of you must have been born after 6 April 1935. Applications have been open since February 2015 and will remain so for the duration of the 2015/16 tax year. One person in a couple must apply online via the government’s website. If successful, HMRC will notify the recipient of the changes to their PAYE tax code. Prime Minister David Cameron said the allowance would give married couples and civil partners “extra support and more inancial security”.
Married Couple’s Allowance
Married Couple’s Allowance rates Tax year
2015/16
2014/15
Maximum amount
£8,355
£8,165
Minimum amount
£3,220
£3,140
Income limit
£27,700
£27,000
Contact us to discuss personal tax planning.
Credit ratings system confuses consumers Two thirds of people who think they have a good credit history have never checked their credit report, according to research by Experian. The survey asked more than 2,000 people about their creditworthiness and found that 71% believe their credit history is excellent. However, 66% of these have never looked at their credit report. The research suggests that many people misunderstand the credit referencing process:
The Married Couple’s Allowance reduces your income tax bill by 10% of your entitled allowance. For the 2015/16 tax year, eligible couples will receive the maximum allowance of £8,355 if they don’t exceed the income limit of £27,700. This would take up to £835.50 of your tax bill.
• 15% are unaware that missing payments can damage their credit rating • 44% don’t know that applying for multiple sources of credit in a short time period can damage their creditworthiness • 24% think that good credit ratings are based on having a good salary • 44% think that their rating will be boosted by only making the minimum repayment. Julie Doleman, managing director of Experian UK and Ireland, said:
The allowance goes down by £1 for every £2 of income over the limit. However, there is a minimum allowance of £322 that all eligible claimants are entitled to irrespective of their income.
“We understand how to properly manage your credit accounts and knowing what lenders look for when reviewing a credit application is the key to building an excellent credit score.
To qualify:
We understand that people can ind the topic confusing, but the good news is that it is possible for everyone to take control.”
If you or your partner were born before 6 April 1935 and therefore don’t qualify for the Marriage Allowance, you may be able to claim the Married Couple’s Allowance instead.
Important Information
• you must be married or in a civil partnership • you must be living with your spouse or partner • one of you must have been born before 6 April 1935.
Pensions eligibility and the way in which tax charges (or tax relief, as appropriate) are applied depend upon individual circumstances and may be subject to change in the future. You can only normally access a pension at age 55. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any
Talk to us about your personal inances.
investment decisions based upon its content. The value of pensions can fall as well as rise and you may not get back the amount you originally invested. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. E & OE.
