Post-budget webinar: Our experts unlock the pension puzzle

This article was written by Harry Plunkett, Wealth Planner, and originally published by Canaccord.

The UK Budget earlier this month introduced a significant shift to pension taxation, which calls for a careful consideration of wealth planning. It also highlighted how the UK pensions landscape is evolving, requiring flexibility and attention dedicated to planning the protection and growth of your wealth*.

The Budget was arguably not as severe as some had feared, with many anticipating seismic increases to taxes on wealth. It’s also worth noting what didn’t change.

Over recent years, the responsibility of contributing to a pension has shifted away from the employer to the individual. However, the tax relief of contributions has stayed the same and pensions continue to remain the driver of savings. There was also no reintroduction of the Lifetime Allowance or a change to the annual allowance.

But, one significant shift is pensions being pulled into the inheritance tax (IHT) net, which could be enough to change behaviour on pensions and how they are viewed as an asset. While the seven-year-rule and £3,000 gifting exemption remain intact, it’s crucial to have a conversation about IHT planning with a specialist wealth planner.

It’s important not to make any knee-jerk reactions: there is time to wait for more detail and clarity and plan ahead. The primary reason for having pensions – for savings – stays the same.

In our latest webinar Harry Plunkett, Wealth Planner and Toby Carpenter, Wealth Planning Director reviewed how the Budget will affect pensions and discussed the considerations that must be made following the announcement to stay informed, proactive and take control of your pension strategy.

They also discussed:

• Why have the government said pensions will be pulled into the IHT net by 2027? Why not straight away?
• Will drawing on a pension be considered income?
• How does having AIM shares in a pension pot complicate things?

*Please note that the changes announced may affect clients in Scotland differently to those in the rest of the UK.

You may also be interested in:

• Why cash flow planning is not just for business
• Whole of life cover: The ‘secret’ inheritance tax mitigation tool
• The secrets of calculating a wealth retirement

Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity. Where investment is made in currencies other than the investor’s base currency, the value of those investments, and any income from them, will be affected by movements in exchange rates. This effect may be unfavourable as well as favourable. Past performance and future forecasts figures are not a reliable indicator of future results. The tax treatments discussed are based on our current understanding of UK legislation. It is a broad summary and cannot cover every circumstance and it does not constitute tax advice.