The start of a New Year is an excellent time to take stock of your financial position, in particular reviewing your pension plans. You may have old-fashioned plans that could well benefit from a thorough New Year's overhaul. We can provide you with an independent assessment of your situation, in particular looking at whether you have inflexible contract terms, unnecessary investment restrictions and a review of your charges. Providers often upgrade products to retain a competitive edge, but don't automatically apply the improved terms to older policies.  

The offerings

There are two types of contract that need to be examined:

■ Retirement annuity policies (RAPs), which were available until personal pensions were made available from 1 July 1988.

■ Personal pensions.

Although new RAPs were not available after 30 June 1988, it has been possible to continue making contributions to existing policies. RAP and personal pensions have different age-related maximum contributions expressed as a percentage of earnings. The RAP rates are lower, but are not subject to the "earnings cap". This restricts the earnings on which you can base personal pension contributions to £102,000 in 2004-2005.  

Single regime

It is currently being proposed that in April 2006 the different Pension rules will be replaced by a single regime that will allow you to invest up to 100 per cent of earnings each year.  In practice any such contribution is likely to be restricted so that it does not exceed your Annual Allowance (ie. £215,000 in tax year 2006/07). It is also proposed that there will also be a Lifetime Allowance for tax-approved pension funds of initially £1.5m. Funds above this will be subject to a Lifetime Allowance charge. Where such excess funds are taken as a lump sum these will be taxed at 55%.   Where the value of your pension rights as at 6 April 2006 exceeds the Lifetime Allowance, or is likely to do so in the future, you can elect for special transitional protection of these rights.

"We can provide you with an independent assessment of your situation"

If you would like to give your pension provision a New Year's overhaul and to discuss the options available to you, please e-mail or contact us. 

Levels, and bases of, and reliefs from taxation are subject to change.