Thursday, 13 November 2014

Tax Efficient alternatives to Pensions

2014 is the year that people were granted the freedom to plan a retirement suited to their lifestyle[1], however with the restriction of an annual allowance currently set at £40,000 (although it is possible under certain circumstances to go back 3 years to top up any unused previous allowances), a number of people might wish to look at tax efficient alternatives. Some examples could be:
  • Individuals who are in danger of exceeding their lifetime or annual allowances;
  • Individuals who are concerned about the income tax treatment of large withdrawals from pension, and may wish to look at alternatives;
  • Business owners looking to sell – shelter any capital gain – and plan for their retirement in a tax efficient manner;
  • Younger investors who would be keen to explore alternatives that could be used to replace or compliment pension arrangements.

The good news is that there are alternatives available that could be considered as potential solutions.

Two alternatives that could be suitable are Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS). These have been in existence for over two decades and each offer advantageous tax reliefs. There is no stigma of tax avoidance as these are well established, government backed schemes designed to encourage investment in high growth entrepreneurial companies.

Investors need to be aware of and comfortable with the risks associated with investing in VCTs and EISs, and this would be an integral part of any discussions between potential investors and Ward Williams Financial Services Ltd as Independent Financial Advisers.

We expect that in retirement there will be a significant shift to alternative tax efficient investments alongside pensions and investors of all ages should give these careful consideration.   

For more information do not hesitate to contact Cliff Pocock or Nigel King at Ward Williams Financial Services Ltd on 01932 830664 or by email on

[1] Subject to sufficient monies being set aside

Thursday, 6 November 2014

Pension flexibility

The Government has announced that people who wish to access their defined contribution pension flexibly will be able to go to a local Citizens Advice Bureau across the UK for expert free and impartial face to face guidance or receive telephone guidance from the Pensions Advisory Service.

In Budget 2014 radical changes to the way individuals can access their pensions were announced. The Government promised that those able to take advantage of these flexibilities would be entitled to free and impartial guidance on their available choices as they approach retirement.
Pension expert Dr Ros Altmann CBE said: 

‘This is a big step forwards in ensuring the pension revolution announced in the Budget will have a meaningful impact on pension savers. It is clear that, currently, most people saving for a pension don’t understand all the vital issues, and it’s really important that they receive impartial help to make the best decisions for themselves.’

‘Both the Pensions Advisory Service and Citizens Advice have longstanding experience in helping the public with financial issues; and it is really important that people do trust the scheme, otherwise they remain at risk of stumbling into poor decisions.’

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