Exceedingly good pensions
The exciting final of GBBO is on tonight at 8pm. My favourite winner was Nancy in 2014. As reported in the Sunday Times, she worked for 33 years in the Health Service; 20 of these years were not pensionable but she paid into a private pension. Smart lady!
So can you have your cake and eat it? In pensions, yes you can……
- You contribute and you get a contribution from your employer
- You get tax relief up to your highest marginal rate
- Even non tax payers can get tax relief on their contribution
- The fund is invested in a very tax friendly way
- At retirement, you get 25% of your fund tax free
Its cake with icing on the top!
At TPAS, we are cake lovers. Here is our recipe book of pension cakes.
- Dundee fruit cake – a traditional Scottish fruit cake made with currants, sultanas and almonds; sometimes, fruit peel. It is rich and dense. This cake lasts forever so it is the defined benefit of cakes as it is expensive but provides sustenance throughout retirement.
- Victoria sandwich – a relatively straightforward sponge cake sandwich with jam and buttercream but can be subject to many variations; like a personal pension plan where the investment options can be a few mainstream funds through to the full options available on SIPPs.
- Battenberg cake – a cake, covered in marzipan, with a distinctive checkerboard of pink and yellow sponge stuck together with jam. The cake was purportedly named in honour of the marriage of Princess Victoria, a granddaughter of Queen Victoria, to Prince Louis of Battenberg in 1884. A reminder that pensions are part of a financial settlement on divorce; TPAS offers divorce appointments to explain more.
- Ginger parkin –traditionally made with black treacle in Yorkshire, baked to a hard cake but with resting becomes moist and even sometimes sticky. This has to be the drawdown option where the choices on retirement can prove sticky.
- Carrot cake - The origins of carrot cake are disputed. Recipes for carrot cake occur as early as 1827 in a French cookbook although the Swiss claim it as theirs and it remains the chosen cake for birthdays of children. The popularity of carrot cake in this country was due to rationing in WW2. There are some significant variations in the ingredients of a carrot cake. Maybe this is the workplace pension with the charges cap but the different of ‘net pay arrangements’ and ‘tax relief at source’.
- Jaffa cake – McVitie's did not trademark the name so it is used by other manufacturers. The cake or biscuit was part of a VAT tribunal in 1991, with the court finding in it to be a cake so not VATable. What do you think?
If this has got your mouth watering, contact TPAS so that we can help you with your pension cake choices.
Exceedingly good pensions!