Your pension queries answered

The Compensation Experts (the-compensation-experts.co.uk) determined the top pension questions posed by Britons in 2021 by analysing Google Data – and answered them.

1.Are

With an incredible 5,760 Google searches, Brits are clearly concerned about the tax implications of taking out a pension. Your pension is treated as earned income and is subject to income tax. You’re usually able to withdraw 25% of your pension pot as a tax-free lump sum as soon as you turn 55.

pensions taxable? 2.Are pensions worth it?

In short, yes. Paying into a workplace pension is a tax-efficient way of preparing your finances for retirement. Even better, your employer is obliged to top up your pension pot with a contribution of at least 3% of your salary each month.

3.Can I inherit my husband’s state pension?

If your spouse dies, you will be eligible to inherit at least part of their pension plan. However, you must have been married before 6 April 2016, and your partner must have reached state pension age before April 6, 2016 OR would have reached state pension age by this date. If you remarry before you reach state pension age, you will not be eligible to inherit your partner’s pension.

4.Pensions:

You can cash in 25% of your entire pension savings once you reach the age of 55, as a tax-free lump sum. After this, you can continue to withdraw the remaining 75%, but you will have to pay the standard tax rates (as well as any withdrawal charges).

can you cash them?

5.Are

All personal pension pots are protected by the Pension Protection Fund (PPF), which covers up to 100% of your payments should your employer goes bust.

private pensions safe?

6.How

Firstly, you can make an informal spousal agreement to protect each of your pensions in the event of divorce. Alternatively, there may be a split. This can either come in the form of a pension transfer, or one of you can offset the value against other shared assets.

pensions are divided in divorce