Case Studies

These case studies are for illustrative purposes only and do not constitute advice.

How much will I get from the plan?

Will my spouse be protected in the event of my death?

Mr Tom Cassidy

Tom is 55 in May 2015 and wishes to pay off his £45,000 mortgage over 3 years.

His salary is £23,000 and he is a business owner on the isle of Anglesey, he is a basic rate tax payer at 20% and has a Personal Pension valued at £97,560.

As Mr Cassidy is 55 after April 2015 he will be able to access his money from the pension plan in the following way:

Current Plan: XYZ Pension Company
£97,000 Fund £24,250 tax free cash £72,750 balance of fund.

Tom could use all of his entitlement of 25% tax free cash to pay £24,250 off his mortgage then take £12,700 gross (£10,160 net) in year 2 leaving a balance of £10,590 in year three. The extra income in year two means he would have a total income of £35,700, which is below the higher tax threshold as it would be in year three unless his income increased.

Mr & Mrs Phillips

Alan Phillips is 57 and his wife Karen is 56 they wish to help their daughter Haley who has debt from University, they also want to provide a deposit for a house Haley would like to buy.

His salary is £19,000 and is employed; he is a basic rate tax payer at 20% and has a two Personal Pensions valued at £78,890.

Mrs Phillips is also employed with a personal pension valued at £65,760 her salary is £12,000.

Current Plan: XYZ Pension Company.
As the total amount needed is £36,000 then all of this could be taken tax efficiently in year one as follows.

Alan could use all of his entitlement of 25% tax free cash of £19,722 with Karen using £16,440 of the tax free entitlement from then on any further amounts would be classed as income.

The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

Tax treatment varies according to individual circumstances and is subject to change.

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