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Quarter of over-55s unaware of pension tax

More than a quarter of people approaching retirement are unaware of the tax charge they will face if they withdraw their pension savings as cash.

According to a survey of more than 2,000 over-55s by Legal & General, 27% believe they can access their pension pot tax-free, while 21% say they would be ‘shocked' at having to pay tax on it.

In fact, pension withdrawals are only tax-free for up to 25% of the amount withdrawn, with income tax due on the other 75%.

Savers were also reluctant to take risks with their pension pots. Nearly half (46%) don't want to take any risk at all, and 73% would avoid any ‘big risks'.

However, figures from the Financial Conduct Authority show that a third of people who recently invested in pension funds were not sure where their money had been invested.

Emma Byron, managing director at Legal & General, said:

"None of us spend as much time as we should thinking about pensions and retirement planning.

"But leaving important decisions about later life to the last minute could potentially leave you poorer in retirement.

"It might even put the hard-earned pension pot you've built up during your working life at risk."

Speak to us about your pension saving strategy.

Why Clients Choose Easy Accountancy

Easy Accountancy offers a low cost, fixed fee accountancy package with all clients receiving their own dedicated, friendly, approachable accountant.

All of our accountants specialise in providing accountancy services to the self-employed, freelancers, sole traders, small to medium sized limited companies and private individuals. All accountants are employees of Easy Accountancy and we never outsource or offshore work.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own dedicated accountant throughout the year and covers all your business and personal tax affairs needs.

All our accountancy services include:
  - Unlimited access to your accountant
  - Ongoing advice on how to manage your business
  - Proactive tax advice throughout the year
  - Updates and reminders so you'll never miss a deadline
  - Free bookkeeping software

As a sole trader our fees start at just £60 + VAT a month, for this you receive the above plus:
  - Completion of your Self-Assessment tax return
  - Advice on how much Income Tax to pay
  - Guidance on National Insurance contributions

As a limited company our fixed fee packages are bespoke to your needs, however typically you’ll receive the above, plus:
  - Completion of your year end accounts*
  - Completion and submission of your annual return Companies House
  - The director/s Self Assessment tax return
  - Payroll bureau
  - Dividends and corporation tax computations

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 01442 275767 or email newbusiness@easyaccountancy.co.uk.

*If you would like us to complete your company year end accounts we simply ask that you have been a client of Easy Accountancy for one year or have made 12 monthly payments.