Retirement Solutions

When you are ready to start taking some income in retirement there are a multitude of choice. These range from Income Draw Down, Phased Retirement, Standard Annuity, Protected Annuity, Indexed Annuity, With Profits Annuity, Tax Free Cash Only etc... 

Our role is to understand your requirements and advise on the most appropriate solution. However in keeping with the rest of this site are a few more unusual real life examples:

1. Tax Free Cash
2. Tax Free Income
3. Pension Loan Back
4. Company Property Purchase
5. Purchase of Allowable Asset 

Tax Free Cash 

Often people could benefit from all or some of the tax free cash element of their pension but are not yet ready to retire. We have clients who have used this to buy overseas property, fund a medical operation and to purchase a key asset for their company. Whatever you have earmarked this money for we can advise on the best course of action for you. 

Tax Free Income  

Many people don't actually retire but simply reduce the amount they work as they get nearer to retirement. In such circumstances they need to supplement earnings with some pension money in the most tax efficient way. 

One way of doing this is to take the annual income as tax free pension. The aim being to avoid higher rate tax when the pension and earned income are added together. 

We are able to advise and arrange the spreading of the tax free cash income over a number of years in order to avoid higher rates of tax completely.

Pension Loan Back 

When two business owners have quite a large age difference between them there will be a discrepancy in exit objectives. If one director is say 55 and the other is 40 and the expected retirement age is 60 then clearly there is gong to be a problem. 

One solution is to make pension contributions with the aim of then borrowing from the pension fund in order to fund a share buy back from the older retiring director. 

In this way the share buy out is made tax efficiently and is planned and paid for out of cash flow over a number of years. 

Company Property Purchase

Often the directors wish to purchase their own company property but cash flow constraints will not allow this. Here is where existing pensions provide an invaluable helping hand. 

We have many instances where we have turned existing pensions into cash and used the proceeds as  the deposit for property purchase. 

We have enabled clients to purchase part of the property with old pensions, pension borrowings and personal borrowings and company surplus funds. 

Purchase of Allowable Assets

Another form of planning involves the sale of a pensionable asset to the pension fund such as a commercial property. Often this property is owned by the directors/ partners or the limited company. 

The benefit is that with careful planning the whole value of the property comes back to the director as cash, often at low or minimal tax rate. 

The director ends up with all of their pension as a cash lump sum. The pension fund holds an income producing asset with which to provide the same director with a pension income in the future.