If you want to retire comfortably, you’ll need to think about your retirement and how much you’ll need. Sadly, the state pension won’t be enough and you’ll need to look at other options to get on top of your retirement planning. Making sure you’re enrolled in your workplace pension could help you get a step closer to your retirement goals, but if you want to make the most of your later life and maximise your future income, it could be a good idea to consider a personal pension. At Wealthify, we’re about to launch our own personal pension to help you take control of your retirement without hassle. Here’s what you need to know about our upcoming pensions.
How does a Wealthify Pension work?
Our new Wealthify Pension is a type of pension called a SIPP (Self-Invested Personal Pensions). Not only will your money be invested in a large range of investments, such as shares and bonds, you’ll be able to choose how much you pay into your account. You’ll also receive tax relief from the government, which will help boost your pot. The only difference between other SIPPs and a Wealthify Pension is that you won’t have to pick your own investments – we’ll do the hard work for you, from building your pension to managing it on an ongoing basis.
How much tax relief will I be getting?
With a Wealthify Pension, you’ll receive a 25% top up every time you make a contribution, up to the government’s set limit. What does this mean, you ask? Well, if you wanted to invest £1,000, you’d only need to put £800 in your pot as the government will add the remaining £200. If you’re a higher or an additional rate taxpayer, you could benefit from an extra boost. If you fall in one of these two higher rate categories, make sure you contact HMRC to claim your extra top up.
Also, if you pay into a Wealthify Pension, you won’t need to pay UK tax (income and capital gains tax) on any profits you make, meaning you get to keep more of your potential returns. And that’s not all. Once you reach the age of 55, you’ll be able to withdraw up to 25% of your pension money as a tax-free lump sum and what you do with the rest of your pot is up to you. You can either take your whole pension as a lump sum in one go, withdraw sums when you need them, or get paid a regular income based on your pot size. Or you can do nothing and carry on investing.
How much can I put in my Wealthify Pension?
Each tax year, the maximum that can be contributed into your pension is £40,000 – this limit is the combined contributions by you and any top-up you get. For example, say you earn £60,000 a year, and you decide to put everything in your pension, you’ll only get tax relief on £40,000.On the other hand, if you’re unable to use your full allowance, you have the possibility to carry it from the three previous tax years, as long as you meet the two following requirements: your earnings need to be at least equal to the total amount of your contributions and you need to be signed up to a registered pension scheme.
And although you can start taking money out as soon as you turn 55, you’ll still be able to pay into your Wealthify Pension until you’re 75, so be sure to make the most of it and consider making as many contributions as you can afford.
Who can open a Wealthify Pension?
You can open a Wealthify Pension if you’re a UK tax resident aged between 18 and 75. Our personal pension is particularly well-designed for self-employed people who want to start planning for their retirement. Unlike employed people, those who are self-employed don’t get automatically enrolled in workplace pensions and they need to arrange national insurance contributions on their own. As a result, they’re more likely to struggle when building their retirement pot. Paying into a personal pension could help you reach your retirement dreams.
How can I open a Wealthify Pension?
Opening a Wealthify Pension is easy! All you need to do is choose the risk level that suits you and the amount of money you’d like to invest – you can start from just £50! We’ll do the hard work, from picking your mix of investments and making adjustments to your Plan, if needed. Our investment team will actively monitor your Plan and make changes to take advantage of the good days and shelter your portfolio from the bad days. But it doesn’t stop there. Every time you add money to your pension, we’ll automatically add the 25% top up to your pot and invest it for you - that way you don’t have to deal with any paperwork and can enjoy your time doing what you love.
Can I transfer my pensions to Wealthify?
Yes, you can transfer your pensions to Wealthify. You just need to choose how much you want to transfer, select the risk level you’re most comfortable with, and complete the official Pension Transfer Form - we’ll do the rest. If you fancy transferring your pensions to Wealthify, it could be a good idea to locate your old pots and dust off your pension documents, to help the move go smoothly.
If you have any questions about opening a Wealthify pension or transferring your pensions to us, please don’t hesitate to contact us on 0800 802 1800 or via LiveChat.
The tax treatment depends on your individual circumstances and may be subject to change in the future.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.