Tax Planning


With just a few items of information we can help you understand the tax implications of your retirement choices
£
£
£
£
£
£
£
£
£
£
£
£
£
£

 

Important notes – please read carefully

1.    Once you have input all of the required values, you must click the Calculate button to estimate the income tax that you will pay in the current tax year.

2.    If you are a Scottish tax payer, please ensure you have ticked the check box above before initiating any calculations.

3.    You can investigate the effect on the amount of income tax you will pay by changing input amounts and clicking the Calculate button again.

4.     If your fund is above £1.073 million and you do not have a protected lifetime allowance or you have started drawing an income or received tax-free cash from another pension scheme, the maximum tax-free cash amount may be less than 25% of your Total Savings. In this case, you may need to consult a financial adviser who can advise you about your options and whether any excess tax charge may be triggered.

5.    When entering income from other sources in the current tax year, the figure you should input is normally calculated as follows:

a.    Add up taxable income from employment (including benefits in kind) or self-employment and any other significant taxable income (e.g. occupational pension, state pension, income from investments)

b.    Reduce the aggregate amount in a. by any trading losses if self-employed and relevant charitable donations not subject to Gift Aid relief at source.

6.    If HMRC has paid basic rate tax into an arrangement you have nominated that is subject to “relief at source”, your basic rate income band is increased to reimburse HMRC for the tax advanced with other tax thresholds adjusted accordingly.  Gross Payments into "relief at source" accounts would be additional to the net income illustrated.

7.    You must be at least age 55 to be able to withdraw money from your retirement savings.

8.    The income tax figures calculated above are only estimates, your actual income tax liability may be different, for example, if you have income from other sources such as dividends, property or insurance policies. For a definitive statement of your actual income tax bill, you would need to consult a specialist tax adviser.

9.  Calculations are based on income tax allowances and rates in the 2021/22 tax year.

10. This calculator enables you to estimate your total income tax bill for your income from employment, self-employment or other pension sources.

11. This illustration only allows for income tax and does not include any National Insurance contribution deductions from your income.

12. Any remaining Total Savings (after you receive tax-free cash and make a withdrawal in the current tax year) will be available to provide you with an income in future years. For example, it could provide a temporary income until your State Pension commences. Please note that all income (other than any Tax-Free Cash sum you receive) from your retirement savings is taxed as earned income.

13. The income tax estimate is for the current tax year only (2021/22).

15. Please note that income tax may be taken in stages from your withdrawals in excess of Tax Free Cash. An initial deduction may be taxed at an emergency income tax rate, and any underpayment or overpayment of income tax, as a result of the use of the emergency tax code, will be settled subsequently as agreed with HMRC.

16. Please refer to the Regulation Section of this website for more information about tax treatment of payments and income and who to contact for guidance or advice.

17. Individuals are looking to defraud you of your retirement savings by various methods. See Money Advice Service (https://www.moneyadviceservice.org.uk/en/articles/how-to-spot-a-pension-scam) for more information.