Contractor Pensions

Contractor Pensions

We're the experienced Contractor Pensions and investment advisers in the UK. Whether you are 48 or 28, we will advise you on the best pension to suit your needs and retirement goals.

When it comes to organising your pension don’t leave it too late. According to MFU the pension provider, 48 is the age at which people finally accept that they cannot work forever. If you left organising your pension until then it would be difficult to ensure a comfortable retirement income.

Are you on track to reach your retirement goals?

When it comes to planning your retirement, it is important not to underestimate how much income you will need per year to maintain a comfortable living standard.

According to a study by BlackRock, British pension investors hope to achieve an annual household income in retirement of £27,400, and believe that in order to achieve this level of income, they will need to save £259,000. Unfortunately, the truth of the matter is that with life expectancy on the rise, they would actually need to save closer to £525,000 in order to achieve their goal.

Make the most of the £40,000 annual allowance

In order to avoid financial worries when it comes to retirement, you should try to ensure that you are taking full advantage of the annual allowance that you can invest up to per year and receive tax relief at your highest nominal rate. This tax year the annual allowance remains at £40,000, but if you still have a large lump sum to invest and didn’t manage to catch the end of tax year deadline then you can still make use of carry forward rules and input periods to invest up to £220k in 2015/16.

If you have built up a pot of retained profits in your limited company then you could invest them directly in to a pension and avoid a hefty corporation tax bill. Whilst this will mean delaying getting your hands on the cash until you reach age 55, it does represent a very tax efficient method of transferring funds from company to personal hands. At 55 you can choose from a myriad of different options as to how to access your funds following changes to pension flexibility in the 2014 Budget.

As long as your day to day expenses are covered and you have taken any salary or dividends that you require, you should be able to invest as much of your remaining income and retained profits into a pension as you would like because there is no relationship between salary and the size of a company contribution. As funds are transferred directly, there is no personal income tax or national insurance deduction and you also save on the corporation tax that you would otherwise have paid on this year’s profits.

More recently, the Chancellor abolished the 55% death tax from April 2015 so you can now pass all of your pension benefit to your descendant’s tax free in future. So there are now tax savings available at both ends of the pension timeline, both when you invest and also when your children inherit.

ContractorFinancials Active Management Service can get your retirement plans on track.

Saving for the eventual day you decide to hang-up your keyboard and retire is one of the greatest investments you will make. Given average life projections are extending, it is probable that you are funding a retirement of over 30 years.

In addition to advice on a suitable pension vehicle ContractorFinancials also offer their clients a tailored portfolio service to help you gain the maximum possible return at a level of risk you feel comfortable with.

Their investment committee meets to review the construction of their client portfolios and gives quarterly feedback on areas such as asset allocation, geographic and sector allocation, performance and risk to help ensure your retirement plans remain on track at all times.

Your advisor will then also make contact on at least an annual basis to review your investment as due to changes in asset prices, or even perhaps a change in your personal circumstances, your risk tolerance may have changed.

Don’t delay, invest today…

For any queries, please fill in the Request a Call Back form on this page or simply write to us at [email protected]

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