Savers will be able to invest up to £60,000
of their income into their pension each
year, thanks to recent pension reforms announced in the March Budget, as part
of a wider package of reforms designed to tempt early retirees back into the workforce.
What type of income can I invest into my pension?
Pensions are a desirable means of investing because your contributions benefit from preferential tax treatment, which can help your pot grow faster.
Only some types of income qualify for tax relief, which the Government calls “relevant UK earnings”. These include:
- Employment income
- Taxable redundancy payments
- Benefits in kind which are taxable
- Profit related to pay
- Statutory sick pay, statutory maternity pay
- Permanent health insurance payments paid by the employer while you are still in employment
- A UK furnished holiday lettings business
- An EEA furnished holiday lettings business
- Patent income and royalties
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If you’d like to discuss your requirements please feel free to contact our advisors