Daniel Minsky

“My family's financial future is in safe hands with The Orchard Practice

Joanna Grankin

“Working with Josh means I feel hugely more secure about my financial future.

Maureen Byrne

“Josh keeps everything simple; he doesn't use financial jargon.

Charles & Joanne Bloom

“We feel very safe and secure about our financial future knowing Josh is guiding us

Paul & Sandra Burns

“The Orchard Practice have given us the confidence that we can enjoy our retirement when the time comes

Sally Wilds

“Josh has made me feel much more positive about my future

How tax efficient is your pension?


By The Orchard Practice

The main purpose of a pension is to build funds for your retirement in the most tax- efficient way possible.

You may contribute regularly to your pension, but do you take full advantage of the tax benefits it offers you? For instance, did you know your pension could help you reclaim valuable personal tax allowance – and even Child Benefit?

Over the lifetime of your pension, these potential benefits could contribute significantly to the funds available to you at retirement.

Here are four examples of how your pension could work harder for you

1. Use contributions to realign Personal Allowance for high earners (over £100,000)

Nearly everyone who lives in the UK is entitled to an Income Tax Personal Allowance (the amount of income you can receive each year without having to pay tax on it).*
This Personal Allowance is reduced by £1 for every £2 of taxable income over £100,000.
By making a pension contribution, you could reduce your taxable income, and reclaim your allowance. This is particularly valuable if you have a taxable income of between £100,000 and £116,210.

2. Prevent the erosion of Child Benefit

Since 7 January 2013, if you’re a parent earning more than £50,000 the amount of Child Benefit you receive reduces. It goes completely once earnings hit £60,000.**
A pension contribution can help you reduce your earnings and therefore allow you to reclaim Child Benefit.

3. Maximise tax relief on contributions/minimise tax on pension income

The government encourages you to save for your retirement by offering tax relief*** on your pension fund up to a certain amount.

4. Paying in more than your annual allowance

You are allowed to pay up to £40,000 annually into your pension. Contributions above this amount are subject to tax penalties.****

However, in certain circumstances, you can exceed your annual allowance without penal tax charges applying. This is because you can carry forward three years’ worth of unused annual allowance meaning, subject to earnings, you may be able to claim valuable tax relief.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes, which cannot be foreseen.

*https://www.gov.uk/incometaxrates/personalallowances
**http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/news/childbenefitchargemar2013.htm 3 ***https://www.gov.uk/taxonyourprivatepension/pensiontaxrelief
****https://www.gov.uk/taxonyourprivatepension/annualallowance