Xmas slowdown ideal time to review pension

At the end of a demanding year Contractors will be preparing for a Christmas break, free from the demands of the client. There may well be time now to consider the health (or otherwise) of pension plans as a study by a leading firm of stockbrokers shows 6 out of 10 people have no idea what their pension is worth and over half of UK investors never check how their pension is performing.

In light of recent market turmoil there's never been a better time to revisit fund choices so that you can reposition yourself to make the most of any upturn in the new year.

The number of 65 year olds is set to grow substantially from 2010 as the baby boomers reach their retirement age, but for many this time will be far from the relaxing picture that retirement usually conjures. Stockbrokers Killik and Co found that 78% have no pension's strategy at all.

Given the lack of provision by many Contractors that we find during our day to day discussions with clients, it is not surprising that recent research shows that over a third of the UK population is preparing to work during their retirement in order to maintain their lifestyle.

The group that is most worried about their lack of pension planning is 30 to 50 year olds yet it is this self same group for whom it is not too late to make a significant difference to the retirement nest egg.

To fail to plan is to plan to fail.

If you are concerned about your pension provisions or are not sure how much you have put aside so far, then don't bury your head in the sand. There are a number of different options to fund your retirement and the team at ContractorFinancials are here to help you make the most of them.

Many Contractors have several different pensions dotted around from previous employee pensions to personal schemes and it can be difficult to keep track of where your money is invested. It is not always best to keep several pensions live as it is harder to ensure that they are all working hard for you and money can end up gathering dust in a forgotten fund.

It could be beneficial for you to transfer your existing pensions into one manageable scheme which will allow you to keep track of your retirement fund and plan for the future. If you are one of the 6 out of 10 Britons that has forgotten where your pensions are invested or have mislaid the paperwork then we may be able to help you recover your funds using a search service that we have access to. Once we have located your existing funds we can help you to choose a competitive environment where your money can grow into that all important cash cow that will fund your retirement.

Contractor Pensions - the answer to your retirement prayers

A pension allows you to take advantage of one of the few tax breaks left available to Contractors. You can invest in a pension from both your personal and business bank accounts and the tax relief can be as high as 48%.

For contractors who operate on a One Man Ltd basis any money that is diverted into a pension will avoid the personal taxes that you would normally pay on salary or dividends and pension contributions can be offset as a business expense, avoiding corporation tax.

If you use an umbrella company then you may well be able to take advantage of a salary sacrifice arrangement to reduce your tax bill. We can liaise with your Umbrella Company to put in place a salary sacrifice scheme which allows the 'employer' to transfer funds directly from your contract income into a pension scheme. This transfer occurs before the Employers or Employees National Insurance and Income Taxes have been deducted which, even for a basic rate taxpayer, could save you 39%.

Investing more of your income into a Contractor Pension to take advantage of the tax breaks available can offer a significant boost to your retirement fund and might make the difference between you retiring comfortably or joining the ranks of un-prepared pensioners who will still be working well after their sixty fifth birthday.

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