Three Big Things about Pensions

1. Pensions are a tax efficient method of saving:

If you pay income tax, any money you contribute to a pension will not be taxed
For a standard rate tax payer this is the equivalent of saving £22 for every £100 put into a pension scheme
For a higher rate tax payer the saving will be £40 for every £100 put into a pension scheme
There are no capital gains charges to a pension scheme
You may be able to withdraw 25% (tax free) of the fund value when you take the pension

However, remember income drawn from a pension will be taxed.

2. Pensions are always changing

For example, on 06 April 2006 Gordon Brown made a number of announcements about pensions, many of which were beneficial to predominantly self-employed industries
You should regularly seek independent financial advice (many providers offer a free consultation, so shop around)
Develop a clear picture for yourself of the pensions and savings landscape, and then keep up-to-date.
To help you with this Arts Council England is supporting the development of this website.

3. Pensions are not the only way to save

46% of artists surveyed had an ISA, a more popular form of saving compared to a pension
People are seeing investments in ISAs, or their own property, as suitable alternatives
The pre-budget announcement in December 2006 confirmed that ISAs will become permanent
More than 16 million people now have money saved in ISAs, and the government are proposing a more simplified savings regime
ISAs are another tax efficient method of saving, however the benefit is that savers do not pay income tax or capital gains tax on any income (gains) made.

This site is funded by Arts Council England for educational purposes. No financial advice is given on this site and you are advised to seek personal independent financial advice before undertaking any investment.