Have a Public Sector Pension? Take Advice now and Keep your Options Open

Mar 14, 2015 | Retirement Planning

Have a Public Sector Pension? Take Advice now and Keep your Options Open

Peace of Mind Insurance Cheaper than you think

If you have a public sector pension scheme, you are currently liable to pay the dreaded ‘Death tax’. This can be avoided, however if you take financial advice before April 2015. In doing so you could:

  • Pass on your pension tax-free to your spouse should you pass away (or the other way round)
  • Avoid the heavy taxes on your pension pot that you incur when you or your significant other passes

How to Protect your Public Sector Pension Pot

To protect your pension pot from the ravages of taxation, you have to take advice by the 5th April 2015. This time constraint puts you under pressure. However, the benefits of taking financial advice outweigh the inconveniences.

Currently, should you or your spouse pass away the remaining pension pot is taxed at 55%. This massive chunk simply disappears from your pension pot. This will obviously impact on your spouse’s quality of life. Not only will they have to cope with life on their own, they will have to do so with a greatly reduced income.

If you can sit down with a financial adviser and discuss the possibility of moving your pension to a different managed fund, you could avoid losing your pension to taxation. This tax is also known as the ‘Death tax’.

The cases for doing this will be dependent upon your circumstances. It could be that the tax will not be such a burden, especially if you do not have a significant other. If you do have a significant other however, you obviously want them to be able to live a full life, with all of your pension pot intact.

Will I be affected by ‘Death Tax’?

Currently if you belong to one of the groups below and are paying in to a public sector pension scheme you will be affected by the tax:

  • NHS Staff
  • Civil Service Staff
  • Teaching Staff with a Teachers’ Pension Scheme
  • Police Force

Time is of the Essence

With this in mind the time to act is now. You only have three months to avoid paying the ‘Death tax’ on your pension. By talking to me we can look at the big picture, and see how much you could avoid losing via the ‘Death Tax’ by switching your pension to a new provider.

Click here and complete the form while there is still time to save your pension pot from the taxman. You could even take advantage of Pension Freedom.

Source: Money Market UK
UK Government Information on Death Tax

For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]


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