Should Mastercard and Visa be worried that when we reach for our new “flexible friend” we will be pulling out our pensions rather than our credit card?
At Tax Hound we welcome these changes as it places the customer in control – but with control comes responsibility and are you clear on the tax points to consider before the flexibility snaps?
The first thing to say is not all pension are as flexible as others. Just because you have a pension you should not necessarily expect it to be able to perform cartwheels and somersaults. This isn’t necessarily a bad thing, but you do need to understand why these options are not available.
You need to understand the benefits of the pension savings you currently hold – it is important you make an informed decision and the Tax Hound team would always recommend that you seek professional advice.
You may have to live with the decisions you take on your pension saving for a very long time and you don’t want to inadvertently throw valuable benefits that could secure your long term future for a new version that, may be more flexible and provide a short term fix, but does not provide the same level of guarantees.
Then we need to consider the tax implications.
Any lump sum payment, either flexibly access or from an UFPLS arrangement will be subject to tax through the PAYE system. HMRC have provided clear guidance to providers on how to tax these payments and in a lot of circumstances people are having too much tax deducted at source.
At Tax Hound we can help secure your tax payment and avoid you the stress and hassle in dealing with HMRC. Our tax return centre can submit all forms and have your tax repayment with you as quickly as possible.