Pension Benefit Advice From Price Bailey

IF you were born between April 6, 1955 and April 5, 1960, you have an important decision to make. Until April 5, 2010 pension benefits can be taken from the age 50; but after April 6, 2010 this increases to the age of 55. Peter Daykin, an Independent Financial Adviser for Price Bailey, said: "If you think you may need to access your pension before age 55 you need to act now. You may not have to take the pension itself, you may be able to simply take the tax free cash and defer the pension. If not, there are ways in which the pension can be reinvested so the overall tax position is neutral.

Peter added: "Also if you are approaching the age of 75 and don't want to buy an annuity there are other options available. With a sizable pension fund, pension plans do exist that allow the family (not just the spouse) to benefit from the funds after the bereavement, however, we would highly recommend you seek professional advice before enabling any financial changes."

Were you aware of a hidden 60% tax rate?

No doubt we are all aware of a new 50% tax rate coming in for earnings above �150,000 per year, but given the additional restrictions on personal allowances introduced in the 2009 Budget this means there is a small income band where the effective tax rate is 60%.

Peter Daykin commented: "Because those earning over �100,000 are set to gradually lose their personal allowances on a sliding scale, at a rate of �1 for every �2 of extra income, anyone earning above �112,950 will no longer receive any personal allowance. For anyone earning between �100,000 and �112,950, the restriction results in an effective tax rate of 60%".

Price Bailey has been advising their clients on the best approach to deal with the pension and tax changes. If you would like some professional advice from Price Bailey, Peter Daykin can be contacted on 01353 616201 or by email to peter.daykin@pricebailey.co.uk