The social benefit ceiling plans to hit retirees, because the British will have to work “closer to 70!” | Personal Finances | Finance

0

“It is possible to increase your own pension contributions up to your annual income level or £ 40,000, whichever is less, although your employer will only pay up to a certain amount. It is also important to remember that income from a pension is taxable at your marginal rate, while money withdrawn from ISAs is exempt from income tax. “

Becky O’Connor, head of pensions and savings, interactive investor, warned of the difficulty in planning for coverage of child care costs, due to uncertainty over whether it will be necessary or not.

She added: “The results of the Great British Retirement Survey show that concerns about the cost of care are on people’s minds. The means to pay are limited.

“Many people would understandably prefer to pay it out of unused ISA and pension balances rather than selling their home or taking out an equity loan. However, that requires contributing even more when you’re in good shape, well, and well. work, so that you can have enough for both retirement income and potential care costs.

“If you have to pay for care, this can of course greatly reduce what you can leave from your pension or other investments to relatives. The survey shows that this is also a concern, but less, perhaps because it is understood that no one can do much about the care they will need to protect an inheritance for their loved ones.

“This is something to keep in mind also for younger generations who might expect to receive a legacy. They should be aware that this cannot be taken for granted due to the potential bill for care. “


Source link

Share.

Comments are closed.