Experts are reminding Brits of the seven ‘tricks’ that could significantly boost their pension savings in the coming years.
Increasing pension contributions, using ISAs and taking advantage of tax benefits, including when it comes to capital gains tax (CGT) and inheritance tax (IHT), are among the recommendations.
Here’s a full list of the seven “tricks” people can use to ensure they keep more of their pension in retirement, according to The Stock Dork:
- Maximizing pension contributions before retirement
- Make use of the personal savings allowance
- Benefit from the dividend payment
- Consider ISAs for tax-free income
- Strategically plan recordings
- Taking advantage of the capital gains tax deduction
- Consider inheritance tax planning.
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Experts share the best ways Brits can boost their pensions
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Pension premiums
Contributions to retirement savings are tax deductible, with the government adding an exemption at the highest income tax rate.
If someone works part-time or as a consultant, experts recommend they continue to contribute to your annual allowance, which is currently set at £60,000 depending on income.
Personal savings allowance
This allowance allows basic rate taxpayers to earn up to £1,000 in savings interest tax-free. Higher rate taxpayers can earn up to £500 tax-free.
Through the personal savings deduction, future retirees can ensure that part of the heir’s income is not taxed.
Dividend payment
When one owns dividend-paying stocks, it is crucial that the annual dividend payout is maximized
For this tax year, the initial £1,000 of dividend income is tax-free, which could be a useful source of retirement income for years to come.
Is like
These are savings accounts where people can put money aside without having to worry about paying taxes, as long as it doesn’t exceed a certain amount.
Brits invest up to £20,000 in ISAs every year, and all interest, dividends and capital gains within an ISA are tax-free.
Withdrawals from pension savings
If someone is planning to take money out of their pension pot early, experts recommend making withdrawals within the basic rate tax bracket to help minimize tax liability.
Furthermore, it is also suggested that people take advantage of the 25 percent tax-free lump sum option, meaning it is possible to access part of their pension while losing money to HM Revenue and Customs (HMRC).
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People nearing retirement are encouraged to take advantage of tax-free allowances
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Capital gains tax deduction
Anyone who is in the process of selling assets or planning to sell assets should ensure they take the full £6,000 CGT allowance for the coming tax year. By spreading the sale of assets over several years or transferring assets to a spouse or partner, you can save as much tax as possible.
Inheritance tax planning
Using grants, gifts and trusts could significantly reduce a person’s IHT liability, which could in turn increase their retirement income. As it stands, the current zero interest margin is £325,000, with an additional zero interest margin of £175,000 for the residence.
Adam Garcia, a financial expert at The Stock Dork, urged Britons to take advantage of these hacks to boost retirement savings as quickly as possible.
He explained: “Retirement should be a time of relaxation and enjoyment, not financial stress. By implementing these expert-recommended tax strategies, you can make the most of your retirement and savings so you have more money to enjoy your golden years. Today I plan to keep more of your hard-earned money where it belongs: in your pocket.”