Planning for your Retirement
We should all make plans for our retirement but few of us do and even when they are in place few of us take any notice of what is happening to our pensions or know where they are invested.
At Financial Options we are very aware of the importance of a robust and structured plan for your future and would be pleased to assist you to develop and implement such a plan but even more importantly, help you to monitor performance and make changes where appropriate whether it involves starting from scratch or transferring existing schemes and then contributing to them.
The 2008 Legislation
In April 2008 the Isle of Man Government changed the way in which pensions are dealt with in the Isle of Man, which built upon the 2006 UK pension legislation. There are several benefits in taking an Isle of Man pension for those who are not going to retire in the UK:
- TAX FREE CASH LUMP SUM - the tax free cash lump sum for non-protected rights is 30% in the Isle of Man compared to 25% in the UK
- NO ANNUITY OBLIGATION - you do not have to buy an annuity and you can drawdown the pension fund until you pass away. On death the fund passes to your Spouse and if there is no spouse then it can pass to other family members. They can retain it as a pension and start the drawdown process from age 50 or they can cash it in paying a tax of 7.5%. In the UK on the death of the Pensioner or Spouse, which ever is last to die the fund is cashed and tax and fees can be between 40% and 90%
- MAXIMUM CONTRIBUTION - the maximum contribution per annum is £300,000 as opposed to £175,000 in the UK, tax relief is only allowed upon the taxed element of your income in that year
- NO PENSION LIMITS - there is no limit to the size of a pension fund on the Island but in the UK it is £1,750,000.
There are many factors for you to consider. We need to fully understand your situation and then we can explore the range of options available to you including but not limited to your employer pension, old insurance based schemes, SIPPS, QROPS and annuities.