True Potential Investments’ personal pension is different and exclusively available to True Potential clients.
Unlike many personal pensions in the market, this one offers:
- Free and unlimited drawdowns
- No transaction fees
- No penalty for withdrawals
- No transfer fees payable to True Potential
- No initial charge for the tax wrapper
- Minimum investment of just £50
- No annual charge for the tax wrapper
- impulseSave® top ups
What Is a Personal Pension?
A personal pension is a tax-efficient savings scheme that allows you to invest up to £40,000 each year. You can invest up to 100% of your income up to the £40,000 limit, so if you earn £35,000, you can put it all into your pension.
Recent changes to pensions give greater freedom and flexibility to those with a personal pension. On reaching 55 years, you will be able to withdraw your entire pension in a lump sum or take an income over time.
Importantly, the age at which you can cash in your pension will rise to 57 in 2028. This will then track 10 years below the state pension age, which rises with life expectancy over time. It’s vital that you understand the age at which you will be able to access your pension when setting your retirement goal.
Why Invest in a Personal Pension?
A personal pension is a tax-efficient way to invest for your retirement. Like an ISA, you won’t pay income or capital gains tax on money held within your pension.
However, with a personal pension, you also get a tax top up from the Government:
- If you’re a basic-rate taxpayer, you get a 20% rebate – so for every £800 you invest, the actual amount invested is £1,000, as £200 of tax relief will be reclaimed from HMRC on your behalf.
- Higher-rate taxpayers may be eligible to receive an extra 20% when you fill in your self-assessment return. At 55, you’ll have a lot of freedom over how you withdraw and spend your pension. Some people choose to buy an annuity, which provides a guaranteed income for the rest of your life. Others simply withdraw funds from their pension pot as they need them – this is called ‘drawdown’.
- Additional-rate taxpayers may be eligible to receive an extra 25% when you fill in your self-assessment return.
When you reach the required age, you can take up to 25% of your pension as a tax-free lump sum. You will then pay income tax on further withdrawals, either lump sums or if you decide to withdraw an income directly from your pension.
Since April 2015, you’ve had a lot of freedom over how you use your pension once you can withdraw it. Some people choose to buy an annuity, which provides a guaranteed income for the rest of your life. Others simply withdraw funds from their pension pot as they need them – this is called ‘drawdown’.
The TPI Pension allows for both capped and flexible drawdown. This means you will be able to take out either an income with an upper annual limit or take an income with no annual cap.
Overall, a personal pension is an attractive, tax-efficient way to save for your retirement. You even get a tax top-up from the government in exchange for locking your money away over the long-term. Thanks to the tax top-up, personal pensions are especially tax-efficient if you are a higher rate or additional rate taxpayer while you work and become a basic rate taxpayer when you retire.
Why the TPI Pension?
As well as a saving you money with low fees, with the TPI Pension, you can:
Set a goal for your pension
Track your progress online via our award-winning Wealth Platform technology
Follow your progress via our iOS and Android apps
Top up when needed with impulseSave®
Contact your financial adviser directly via secure message
Your capital is at risk. Investments can fluctuate in value and you may not get back the amount you invest. Past performance is not a guide to future performance. Tax rules can change at any time.
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. www.fca.org.uk Registered in England and Wales as a Limited Liability Partnership No. OC356027.