magazine archive
magazine archive
Ask Rachel
How is a drawdown pot accounted for when paying care costs?
Thursday 21 Nov 2024Could you please explain how someone’s drawdown pot is taken into account when working out how much you have to pay towards care costs. For example, for the purposes of working this out, is the pot of money converted into an annuity income based on the person’s age and capital pot value. And if so...
What should I do after the inheritance tax advantage on pensions was wiped out by the Budget?
Thursday 14 Nov 2024Now we have had the Budget, I think this may alter my retirement planning strategy. The significant IHT (inheritance tax) pensions advantage has now gone (or will within two years). I am 74, have around £1.5 million in SIPPs largely untouched. I have fixed protection 2014, and my tax-free cash...
Do I need to make up for missing national insurance contributions to get my state pension?
Thursday 31 Oct 2024I am a 51 years old, and have worked for the majority of my life. After my children were born in 2010 and 2012, I decided to take a break from work for a few years, returning to part-time work in 2016. I have heard people have a limited time to pay the government to make up for missing national...
Is my pension tax-free lump sum under threat and what should I do?
Thursday 24 Oct 2024I have been reading more and more press reports that the chancellor is going to reduce the amount of tax-free cash lump sum that I can take to only £100,000. I haven’t yet touched my SIPP but I’m really worried that I will lose out if this change goes ahead. Can you tell me whether it is going to...
What happens with any pension contributions in the final months before I turn 75?
Thursday 17 Oct 2024I am a retired maths teacher drawing my teacher’s pension since 2010 and my state pension since 2015. I earn some more by marking GCSE exam papers and by tutoring private students. I also have a SIPP from which I have withdrawn nothing so far. Every year I try to pay into the SIPP enough to stop me...
If I dip into my SIPP then return to work what would be my tax-free allowance?
Thursday 10 Oct 2024I am 59 and have recently taken time off work to provide care and support to my parents. I am a little undecided as to whether I will return to work or call it quits and retire. As such, I would like to take lump sums from my SIPP once a year. So, I have two questions: Should I return to work, will...
How can I lower my income to below the £100,000 threshold?
Thursday 03 Oct 2024I am drawing a final salary pension and the state pension. Very soon, the total of these will take me over £100,000 in annual income when I will start to lose my annual personal allowance of £12,570 and my effective tax rate will be 60%. I have minimised other income outside of ISAs, i.e. dividends...
How will I be taxed when I start drawing income from a SIPP and my state pension?
Thursday 26 Sep 2024During my working life, I have only ever had a single income stream, so tax has just been simple(ish) PAYE. However, that is about to change. I currently get an income from a defined benefit pension, then next year I will also get the state pension, then I will also start drawing-down income from...
Can we put the proceeds from a property sale into a SIPP?
Thursday 19 Sep 2024My wife and I are both pensioners receiving state pensions. We are both self-employed earning between £5,000 and £10,000 a year each, plus we both receive income from renting a commercial property (total around £20,000 per year). My wife receives a pension from the NHS of around £7,500 a year. We...
How much can I pay into a pension as director of my own limited company?
Thursday 12 Sep 2024I am a director of my own limited company. Currently I take a salary up to my personal allowance, and receive the rest of my remuneration as dividends. I have heard that through carry forward I can pay in an employer’s pension contribution up to £180,000 gross. But that this may be limited by the...