Have you thought about making a £3,600 pension contribution for a relative?

  • 3rd November 2017

Who could benefit?

Partner

Children

Grandchildren

What are the benefits?

Encourages savings and cannot currently be accessed to age 55

Tax relief – for a contribution of £2,880 the tax relief would be £720 making the gross contribution £3,600, this equates to 20%

Tax-free growth

For inheritance tax purposes, the contributions could potentially be outside of your Estate

This can be completed each tax-year and for each relative

If the relative earns more than £3,600 then you can pay up to their earnings minus any contributions already paid

Conclusion

With Cash ISA interest rates so poor, this is a great way to effectively make an immediate 20% return, which based on current cash ISA rates would take you over 10 years to make.

If you wish to discuss this in further detail, please get in touch

Written by Dale Regan

Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.