At Birchwood, we regard pension schemes as investment plans with tax relief and our team specialise in supporting employers, directors and high net worth individuals (HNWIs) with relevant and tax-efficient pensions advice.

Withdrawing from a Pension: The Process You Need To Take

Auto-enrolment Pension Schemes

Auto-enrolment is a government initiative to encourage more people to save for retirement. It began in October 2012 with the largest businesses and now all employers are legally required to enrol eligible jobholders into a qualifying workplace pension scheme, although workers can opt out. Both employers and jobholders must make minimum contributions to the pension.

Group Pension Schemes

A group personal pension is a collection of individual personal pension plans that an employer can set up for their employees. Such schemes are usually tax-efficient.

No matter whether you need advice on sourcing the right pension scheme for your business, educating your employees on the values and benefits of their pensions or simply retrieving updates on your current scheme’s performance, we are here to help.

Bespoke High Level Pensions for Directors

We are able to advise on bespoke pension schemes for directors and high net worth individuals (HNWIs), including Self-Invested Personal Pensions (SIPP) and Small Self-Administered Schemes (SSAS).

Working with you to manage bespoke investment portfolios, we can help you to determine and develop wealth management strategies in line with your personal goals.

Self-Invested Personal Pensions (SIPP) and Small Self-Administered Schemes (SSAS)

These schemes can be used by business owners and HNWIs wishing to capitalise on a range of ‘permitted investments’ – including property and land. Such schemes offer tax benefits for their users, and are open to most individuals.

Pension Freedoms

Significant changes back in 2015, now give people accessing pension savings from the age of 55 greater freedom and extra tax benefits.

• Someone with a personal pension, or other defined contribution pension pot, can choose from options including buying an annuity, withdrawing the whole amount or taking part of the pot, with the first 25 per cent tax-free and the rest taxed at their marginal (highest) rate, leaving the rest invested to provide a retirement income.

• They can also take lump sums when they like, with the first 25 per cent of each tax-free and the rest taxed at their marginal rate, but with no regular retirement income.

• People with a defined contribution pension who die before the age of 75 can pass on unused pensions without the beneficiary paying tax. For deaths after 75, withdrawals are taxed at the beneficiary’s marginal rate. In both cases, the fund is free of inheritance tax and can be passed down the generations on the same basis.

Pension and retirement planning needs to take into account these issues as well as the wide choice of pension schemes available.

Annuities

Income from a pension at retirement is frequently achieved by purchasing an annuity. The accumulated fund, after withdrawal of 25% as tax-free cash, is paid to an insurance company that guarantees a set level of lifetime income. It is possible to include benefits such as regular increases, a widow’s benefit, or guaranteed periods of payment but additional benefits will reduce the income payable.

The value of investments and income from them can fall as well as rise and you may not get back the full amount invested.