Your Money - Your Future
Allocating Your WealthBack to News & Views
Although retirement may seem like something that might happen in the distant future, it is important to plan ahead. Time is your most valuable weapon. Building sufficient assets to fund your retirement will take a long time and it's worth getting into the savings habit as early as possible. Even putting away a small amount on a regular basis can make a real difference over the long term.
Investors receive income tax relief on their contributions to occupational and personal pension schemes, subject to certain limits. You can contribute up to £3,600 or 100% of your net relevant earnings (whichever is the greater), up to an overall maximum of £40,000 in the current tax year (2018/19). Your contributions to company pension schemes are deducted before income tax is calculated. For contributions to personal pension schemes, your pension provider will reclaim any tax paid before you made your contributions.
If you have worked for more than one employer, check your previous company schemes and work out your entitlements. It is also worth considering individual savings accounts (ISAs); these are tax-efficient 'wrappers' and all income and capital gains generated by the investments within are paid out free of any further tax. The amount of money you can invest in an ISA is subject to an annual limit (£20,000 during the tax year 2018/19) and this can be invested in stocks and shares or cash, or a combination of the two.