Property as a pension investment – Why did the tax on my private pension increase?

Why did the tax on my private pension increase when I started drawing my state pension?

I’ve just read a post from someone online asking pensions advice on why the tax on their private pension increased when they started to draw their state pension. This person was a retired prison officer, and had served 34 years of service. He lived off his prison service pension until he became eligible for his state pension. However, the tax on his private pension rocketed and he was left out of pocked with no idea why.

When planning for retirement a lot of people forget that the money they receive in retirement is also taxable, based on their allowances. With the age you are able to claim State Pension extending and the value of personal pensions being attacked on all sides, having to pay tax on top hurts personally and of course can significantly impact the money you thought you had to live off.

Taking time to understand your situation and the tax implications is important, as tax planning is always easier if completed in advance of the time when it is required – the clue is in the term ‘planning’.  One of the reasons I invest in property for a pension is that property can be a highly tax efficient way of saving, as you are allowed to offset costs etc.

As most would say given the choice they would rather not pay tax, particularly in their retirement, I would therefore recommend (if you have not already) adding property investment to you retirement planning, and working with an Accountant to ensure you fully utilise every allowance you have to minimise your tax expenditure.

To find out more about how property as a pension investment can be a much better alternative for your golden years, or for general pensions advice, contact Gill Alton today. 

Gill Alton

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Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors in the UK.

Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market.

The service is specifically aimed to support those who recognise the value of a UK investment portfolio, but lack the time, or knowledge to be able to invest for themselves because they are full time employees or Business Owners. With full consultation and comprehensive financial analysis, clients can be assured that their portfolio of strong yielding properties will be built to exacting standards and they will be kept up to date every step of the way.

Having been involved in property for 16 years Gill has built a personal portfolio for her family, and in addition to Alton Property Partners, runs a Property Mentoring Business, Venus Property Mentoring which focuses on supporting new investors onto the investing ladder. Having originally left the Corporate world to be a Qualified Mortgage Broker, Gill’s husband now focuses on their family Mortgage Brokerage in Maidenhead – Alton Mortgages.

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Alton Property Partners
6 Bramble Drive, Maidenhead BerkshireUKSL6 3NX United Kindom •0845-095-5060

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