The government introduced new pension rules, known as ‘pension simplification’, that became effective from 6 April 2006 (A-Day). This completely changed the pension landscape by creating a single universal regime that replaced the previous eight tax regimes.
6 April 2006 – the day that the pension simplification rules came into effect changing the way we can save for retirement.
The Office for National Statistics (ONS) has published figures that show households are saving the biggest proportion of their incomes for six years.
If you are over 65, you should check you are getting the correct personal allowance. The allowance for the 2009/10 tax year is £6,475, but if you were aged 65 to 74 on April 5 2009 it is increased to £9,490. If you were aged 75 or over on April 5 2008 the tax-free allowance stands at £9,640.
Q: Can I invest the full £10,200 in cash?
A: No. Although ISA limits have been extended there are still separate limits for cash ISAs and stocks and shares ISAs. The maximum that can be invested in a cash ISA is £5,100, up from the current limit of £3,600. If you are under 50 you will be able to take advantage of this raised limit from next April.
Corporate bonds are a type of fixed interest security. A fixed interest security is a way of ‘lending’ money to a company in return for a fixed rate of interest over a set period. This type of investment is intended to provide you with a regular, reliable income.
You don’t have to be seriously wealthy for your estate to be subject to Inheritance Tax (IHT) after you die. Currently, IHT is levied on everything you leave over £325,000 (2009/10). Inheritance tax planning is a complex subject and it’s important to obtain professional advice if you have any concerns about your particular requirements, as this could save you thousands of pounds of potential lost tax.
The state pension age is the earliest age at which you are able to claim your state pension benefits. For many years this has been 65 for men and 60 for women, but things are soon to change. And the age at which you can claim that state pension will be determined by when you were born. However, this could all change again under a new government following the forthcoming general election.
Divorce can create financial difficulties. The pensions of both parties in a divorce may be considered when the court decides what money goes where. If one spouse never worked, while the other built up a large pension fund, this will have to be taken into account and the calculations can be complex.