UK pensions and retirement planning

Financial planning, personal pensions and retirement planning with Barclays Wealth

While protecting and growing wealth, you will want to make the most of opportunities to save for retirement through a pension plan. At Barclays Wealth International we are committed to ensuring you make the most of opportunities to do this while you are in the UK.

Pension provision in the UK has two components: the state pension scheme and occupational or personal pensions. The state scheme is a basic level of provision, and there are generous allowances and tax breaks for company and personal plans.

You get tax relief at the highest rate of income tax paid on your earnings on contributions into a pension fund within an annual and lifetime limit. The annual limit for 2009-2010 is £245,000, and the current lifetime limit is £1.75m, and there are further restrictions to reliefs where an individual's income exceeds £150,000.

To help you find a suitable retirement plan, we can introduce you to Barclays Financial Planning. Their retirement planning experts can search the market for the products and services that suit your exact circumstances.

Apply for a Barclays Wealth International bank account before you move to the UK.

You can also call us on +44 (0)141 352 3986^†, or use our call back service.

Our preferred tax-planning partner is the leading financial services firm, Ernst & Young.

UK pension scheme

Qualification for the basic state pension is through payment of national insurance contributions (NICs) on your earnings. The proportion of the full state pension you receive is based on the number of full-year contributions you make.

There is also an earnings-related State Second Pension (SSP) that involves paying extra NICs unless you are a member of a pension scheme that contracts you out of the arrangement. Such schemes can be company schemes or personal pensions. Self-employed people are not part of the SSP arrangement.

The UK state pension age is currently 65 for men and 60 for women, but this is to equalise at 65 for both from 2020 and from then the retirement age will increase until it reaches 68 in 2046.

Supplementing your UK state pension

There are a number of ways of boosting your retirement income above state pension level. This can be through being a member of a company scheme or a personal plan.

In fact, as long as you do not breach the annual allowance, you can have a company and personal scheme at the same time. Also, your company scheme may allow you to make additional contributions to boost your entitlement.

You can find out more about pension provision from the UK tax authorities and from our preferred personal tax advisers, Ernst & Young.

Options for those with no company scheme include personal pensions, stakeholder pensions, and self-invested personal pensions (Sipps).

Sipps offer you a wide range of investments - in funds, shares and other investments as well as commercial property. They have more flexibility, perhaps offering a drawdown facility that allows an income to be taken from the fund without having to use it to buy an annuity until you reach age 75.

Also, if you have a non-earning spouse or a child, you can invest up to £2,880 a year (£3,600 with tax relief) in a pension for them through a low-cost stakeholder plan.

UK pension services

Barclays Wealth International can work with you to develop a strategy to maximise your pension-planning opportunities to ensure you achieve your retirement goals.

Clients can access pension-planning advice through Barclays Financial Planning, whose pensions experts have the knowledge and skill to determine the right structure for your retirement.

For instance, it may be you have a number of pension plans. This may not produce the best result for you, and you might be better off bringing them together in a process known as consolidation. Having everything in one pot means it is easier to monitor and maintain your retirement planning strategy. The pensions experts at Barclays Financial Planning can advise on whether this would be a beneficial course of action.

UK pension tax

Tax relief on pension fund contributions means that basic rate taxpayers only have to pay £80 to have £100 invested. Higher rate taxpayers can get £100 invested for every £60 they contribute subject to limits. These investments grow free of income and capital gains taxes in pension funds.

In the UK, there is a distinction between residence and domicile. To be regarded as a resident in the UK you must be physically present in the country at some time in the tax year, and you will be a resident if you are here for 183 days or more in the tax year. Your domicile refers to the country in which you have your roots, so it is possible to be resident in the UK for many years without it becoming your domicile. This is called resident non-domiciled, and there are particular pensions regulations and practices that apply.

As a UK resident non-domiciled, you may want to take your pension with you if you leave the UK. You may be able to arrange to transfer your pension fund to a recognised qualifying overseas pension scheme.

Then, if you remain outside the UK for five complete tax years, the UK tax authorities have no further interest in your pension fund.

Apply for a Barclays Wealth International bank account now.

You can also call us on +44 (0)141 352 3986^†, or use our call back service.