***UPDATED*** After the UK Budget, should I pay into my pension again?
“Following the budget, should I pay into a pension again? And what about if I have existing transitional LTA protection”
These are questions that I have been asked a few times since Wednesday!
In short, there is no simple answer and it will depend on a number of different things, such as; your circumstances; what your longer term goals are with regards to your pension funds; affordability and so on.
For client’s who are running their own business, funding a pension can be a useful mechanism to move profits from the company into their ownership. It is a corporation tax deductible business expense and with this set to rise to 25% from 6th April for many businesses, this looks even more attractive.
Under the proposed changes and assuming no pension protection is in place, although the LTA tax charges are being scrapped, individuals are still limited to a maximum of £268,275, which is 25% of the current LTA (£1,073,100) in terms of how much tax-free cash (TFC) they can draw