Tax-free extra income

By signing up to the ‘rent a room’ scheme, not only could you enjoy the extra income from the rent, but also up to £4,250 a year is free from tax. ‘Rent a room’ relief is an optional scheme that lets you receive up to this amount in rent each year from a lodger, tax-free. This only applies if you rent out furnished accommodation in your own home.

The main points that could affect you on tax, savings and spending from the Chancellor’s red box

The Autumn Statement 2014 has once again created winners and losers. These are some of the main points that could affect you on tax, savings and spending.

Buyers benefit from a tax-free bracket and incremental steps up

The change to residential property Stamp Duty Land Tax (SDLT) announced in the Autumn Statement 2014 will make the process fairer for the majority of homebuyers. The new rules started on 4 December last year, and these changes apply to you if you are buying a home in the UK for over £125,000.

Perhaps not quite the ‘voluntary’ tax it was once considered

Effective estate planning is about getting the right balance between maintaining access to your money when you need it and saving tax. This is because, in general, the more tax-efficient a solution is, the less access you have to your assets. Safeguarding your own financial future is very important and giving too much away could put this at risk.

ADDITIONAL INCOME PROTECTION

If you have a partner or other dependants, such as children, you might want to think about additional retirement income protection. With income protection, your named dependants could get some or all of your retirement income if you die, either as regular payments over a period of time or as a one-off lump sum.

VALUABLE OPTIONS THAT ALLOW YOU TO TAILOR THE INCOME YOU NEED

In the UK, there are basically two types of annuity:

- pension annuities (compulsory purchase)

- purchased life annuities (voluntary purchase)

AN IMPORTANT ONE-OFF DECISION THAT HAS LONG-TERM CONSEQUENCES IF YOU GET IT WRONG

If you save through a private personal pension, when you approach retirement age you’ll have to decide what to do with the pension fund you have built up. If applicable to you, one option is to buy an annuity. It’s important to find an annuity that suits you and provides the best deal because, after your property, an annuity is probably the biggest purchase you will ever make.

THOUSANDS OF PENSION SAVERS COULD BE IMPACTED UNLESS THEY ACT SWIFTLY

If you are making high levels of pension contributions you will need to obtain professional financial advice to make sure that you know whether you will be affected by the impending new lifetime allowance (LTA) limit changes. Thousands of pension savers could be impacted by the forthcoming changes unless they act swiftly.

TO AFFORD THE LIFESTYLE YOU WANT WHEN YOU RETIRE, YOU NEED TO DO SOMETHING ABOUT IT TODAY

It may be tempting to say, ‘But retirement is a long way off’, yet it’s never too early to start investing in order to protect your future. To afford the lifestyle you want when you retire, you need to do something about it today. You now have a much greater choice when it comes to how and when to take retirement benefits from pensions since the pension simplification rules were introduced.

A REGULAR PAYMENT FROM THE GOVERNMENT THAT YOU RECEIVE WHEN YOU REACH STATE PENSION AGE

The basic State Pension is a regular payment from the Government that you receive when you reach State Pension age. To receive it you must have paid or been credited with National Insurance contributions.

THE SOONER YOU START SAVING FOR YOUR RETIREMENT, THE MORE SECURE YOUR FUTURE WILL BE Saving for your retirement may not seem important when you’re starting out. But the sooner you start saving for your retirement the more secure your future will be.

MAKING SUFFICIENT FINANCIAL PREPARATIONS FOR THE FUTURE

Retirement savings have plummeted among those aged 55-64 over the past year as the cost of living continues to rise, according to Aviva’s latest Real Retirement Report.

HOW TO IMPROVE YOUR GOLDEN YEARS NO MATTER WHAT YOUR CURRENT STAGE OF LIFE

Retirement may seem a long way off for you at the moment but that doesn’t mean you should forget about it. Consider our tips, which could help you increase your retirement income – no matter what your current stage of life – and pursue the retirement you envisage.

Prioritising short-term needs as opposed to long-term goals

Recent years have brought tremendous change around the globe, change that affects us all. People are trying to navigate this shifting landscape, but it’s not easy.

Making sufficient financial preparations for the future

Retirement savings have plummeted among those aged 55-64 over the past year as the cost of living continues to rise, according to Aviva’s latest Real Retirement Report.