High earners are being asked to pay tax on their pension pot before they have access to it

Deborah Stott, NHS worker, always assumed that those who accrued large pension pots had to pay large sums of tax before accessing it.

Deborah’s chief executive had previously received a £20,000 tax bill for early withdrawal of their pension and had paid it.

 Deborah received a letter from her pension scheme saying she had exceeded the annual allowance. They confirmed that there may be tax to pay and, as she was under 55, she would have to pay this herself as she could not yet draw it from the fund as you can if you are over 55.

They offered no specific calculation of what, if any, tax was due she just received an alarming letter saying it might be and she knew a colleague had recently paid £20,000, so she was very worried.

“I first spoke to my accountant about the tax bill for my pension but unfortunately they couldn’t help. This is when I approached financial Affairs. My personal advisor was Alan Walsh and through his thorough investigation and professional planning, I ended up with no tax to pay at all! I have recommended Financial Affairs to a number of my colleagues, it’s incredible the difference it makes, talking to the right person.”

Alan Walsh, Chartered Financial Planner at Financial Affairs was happy to help:

“We did a carry forward annual allowance calculation for Deborah when she received a letter from the NHS scheme saying she had exceeded her allowance for the year and may have to pay a significant amount of tax. Our calculations showed that due to previous year’s allowances being unused she actually did not incur any tax. It is essential that individuals seek professional advice on these matters.”

“As an independent, family owned and operated, Financial Advisory Firm and Insurance Broker we ensure our clients get the best advice and service across all aspects of our business. Established in 1972 we have long-term relationships across a wide range of sectors which allows us to give comprehensive and quality advice to everyone who speaks to us.”

For more information about Financial Affairs visit: www.financialaffairs.co.uk

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