A Pension For Free?

HARDLY A DAY goes by without the 'UK pension crisis' hitting the headlines. The accelerated closure of defined benefits (also known as final salary) schemes the sluggish recovery of the stock market and the alarming statistic that twelve million individuals face an impoverished retirement suggests that action needs to be taken sooner rather than later.

The Government's Pension Commission headed by Adair Turner recently reported that this action is likely to include: a combination of higher taxes and National Insurance contributions (NICs); people working longer; and a greater dependency on the private sector to help replace the expected real term devaluation of the state pension. Tax advisers will almost certainly play a role in helping their clients find the most tax-efficient methods of providing for their retirement.

A pension for a penny

Many readers will remember the old 'pension for a penny' trick. If...