Pension Advice – Tax Relief
Pension contributions receive tax relief. This means that part of every contribution is made from the tax you pay. This is particularly beneficial for higher and additional rate tax payers because they get a higher level of tax relief. Pension Tax Relief is considered by our Pension Expert in The Chatsworth Practice Pension Advice Service.
When benefits are drawn, 25% is paid as a tax-free lump sum. Capital or income from the remainder is taxable. Many people have a lower tax band in retirement than during their working lives. This means many people pay less tax on their pension income than they received in tax relief. A Pension Advisor at The Chatsworth Practice works with clients to ensure they maximise the benefits of pension tax relief and where possible minimise tax payable in retirement.