Pensions Reminder

How you turn your pension pot into income is one of the biggest financial decisions you’ll ever make. ClearSky Financial Services shows how you can make a decision that’s right for you...

Pensions continue to attract the media spotlight. George Osborne recently announced an increase in the full level of state pension, taking it up to £155.65 per week from April 2016. This follows the introduction of pension reform back in April 2015, giving us more choice than ever before when it comes to funding our retirement.

However, recent research by the Financial Conduct Authority revealed that some people could have received up to 60% more income if they’d shopped around for their pension.

Getting it right usually requires you to do some fairly in-depth homework or take financial advice, maybe even both. Whichever route you go down, make sure you’re confident that your choice won’t leave your funds depleted or expose you to unnecessary tax.

If you need some advice, get in touch with our experts to find out how to make your income works as efficiently as possible, or for advice on how to preserve your wealth.


There’s no limit to the amount you can put in a pension but there are limits on how much tax relief you’ll get:

Earnings limit – you get tax relief on contributions up to 100% of relevant UK earning.

Annual allowance – only applies to high earners and is equal to your current year’s allowance (£40k for this tax year) plus any unused allowance from the last three years. As a one off, there is an opportunity to potentially pay more in this year too. But be aware, this annual allowance will reduce in April 2016.

Lifetime allowance –the 2015/16 allowance is £1.25 million but this will be reducing to £1 million in the next tax year.

It’s worth speaking to a financial adviser to see how your current allowance can be used and carried over and seeing what proactive action you can take to reduce avoid unnecessary tax bills in relation to the lifetime allowance.

The value of your investment can go down as well as up and you may not get back the full amount invested.

ClearSky Financial Services is a trading name of Foster Denovo Limited, which is authorised and regulated by the Financial Conduct Authority.

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