Legacy planning holds different meanings for different individuals. For some, it is about ensuring their loved ones are financially secure; for others, it involves safeguarding cherished possessions or supporting charitable causes. Central to this process is drafting a Will, a pivotal legal document that allows you to dictate the distribution of your money, property and possessions after your death.
With interest rates much higher than they’ve been for many years, using your pension tax-free lump sum to pay off your mortgage might initially seem prudent. Reducing your monthly outgoings can be appealing, particularly if you’re approaching retirement and looking to streamline your financial commitments.
Nobody wants to consider what would happen if they became too ill to support their family financially. Financial protection is essential to creating peace of mind for your loved ones, but understanding what cover you may need can be confusing.
Trusts are a powerful tool for estate planning, providing flexibility and control over asset distribution. Properly structured, they can address various scenarios and requirements, ensuring that your legacy is managed according to your wishes long into the future.
How to make sure you avoid becoming one
When considering retirement planning, pension savings are a crucial component of your financial strategy and essential for a comfortable retirement. Securing the right professional advice is critical, as decisions made at this stage will significantly impact you and your family.
Beginning on 6 April 2024, a pivotal shift in pension benefit taxation commenced. The Lifetime Allowance (LTA) was replaced by a new structure comprising three distinct allowances: the Lump Sum Allowance (LSA), Lump Sum and Death Benefit Allowance (LSDBA), and Overseas Transfer Allowance (OTA).
Whether through property, pensions or a blend of both, informed decision-making is crucial.
In recent times, a significant portion of retirees, specifically 14% of those aged over 55, have found themselves re-entering the workforce, driven by the inadequacy of their pensions to meet rising living costs, according to new research[1].
Inheritance Tax (IHT) represents a significant consideration for anyone looking to pass on assets to the next generation. As of the 2024/25 tax year, IHT incurs a 40% charge on the portion of an estate exceeding the nil rate band of £325,000, excluding transfers to a spouse or registered civil partner.
As we embark on the new tax year, it presents an opportune moment to review your pension savings strategy, setting a solid foundation for future financial stability. Early attention to your private pension at the onset of the fiscal year is not just about cultivating beneficial saving habits; it’s also about ensuring you fully exploit the benefits and allowances available to you.
Individual Savings Accounts (ISAs) offer a versatile and tax-efficient way to save for the future, whether for yourself, your children or grandchildren. Now that we have entered the new financial year, on 6 April 2024, significant changes to ISAs have been introduced.
