Fiona, a lawyer, had built up some extra cash from her income and, after discussing what to do with it with her Premier team, decided to put it towards her retirement.

She was keen to do so in the most tax-efficient way possible, particularly as her salary of £160,000 a year meant she was an ‘additional rate’ taxpayer at the time. 

We worked with Fiona’s tax advisor and discovered she still hadn’t used a considerable amount of her pension annual allowance, including some carried forward from previous tax years.

Premier Financial Planner Anna King explains, “We often see this situation – time-poor customers who haven’t used previous tax allowances they’re still eligible for. Those allowances can add up to serious savings for them, but once the time runs out, they’re gone for good. We can help ensure that doesn’t happen.”

As a result of our work with Fiona, she added £80,000 to her pension, all of which benefitted from immediate basic tax relief of 20% and additional relief of up to 25% through her tax return. This brought her taxable income to below £100,000, and therefore also reinstated her personal allowance of £12,570.

So Fiona was able to save over £30,000 in total while contributing significantly towards her pension.

Using her extra cash to boost her pension brought lots of other long-term benefits too. You don’t pay tax on the money your pension makes while it’s held within that pension, and you can withdraw up to 25% of it tax free, up to £268,275, once you reach the minimum age – currently 55. Pensions can also support your inheritance tax planning.

Find out more about how we could help you with your financial goals.

The value of investments can fall as well as rise, and you may not get back the full amount you invest. Eligibility criteria, fees and charges apply. Tax reliefs referred to are those applied under current UK legislation, which may change. The availability and value of any tax relief will depend on your individual circumstances. This case study should not be taken as advice.