Will you suffer as a result of the pension changes
Do you understand how changes to the way in which pensions are taxed will impact on your pension?
The annual allowance is now £400,000 and the lifetime allowance will reduce from £1 million.
This is a complex area and one which many dentists are too busy to get to grips with. Changes to pension allowances could impact dentists quite severely, especially as they progress through their career. Anyone exceeding the annual allowance will have to pay income tax on the excess at their marginal rate of tax which is likely to be 40% or 45% for most dentists.
It is possible that your benefits accrued each year within the NHS pension scheme, when added to any personal pension contributions may push you over the annual allowance of £40,000. Have you checked your situation?
If your total pension benefits are over the new lifetime allowance of £1,000,000, or are likely to be in the future, you need to take action. Have you checked your situation?
Retirement Options for dentists
You are now able to use new flexible drawdown rules and withdraw money from your SIPP or personal pension at whatever amount you decide is suitable for you. Previously, there was a cap in place on the maximum you could withdraw from personal pensions.
Most dentists need advice on their pension planning. Contact Tyas & Company for a free initial consultation on 01293 843900, and find out how you are affected.