Budget 2014 Over 75 Pension Tax Relief

Budget 2014 - Over 75 Pension Tax Relief

Pensions tax: consultation to abolish the age 75 rule

The government will explore with interested parties whether those tax rules that prevent individuals aged 75 and over from claiming tax relief on their pension contributions should be amended or abolished.

What this means?

Currently non- workers such as children and pensioners below the age of 75 can pay into a pension up to £3,600 pa gross of tax relief and relief basic rate tax relief at 20%. 

Meaning you may make a pension contribution of just over £2,800 and with tax relief £3,600 is credited to a pension fund.  This is a fantastic return on your investment.

The consultation may allow for all people to pay into pensions, even over the age of 75 and this means that it presents not just an opportunity to save but also an ideal inheritance tax planning vehicle.  This is because if you die having not taken a pension benfit, it can be paid to your loved ones free of inheritance tax.

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