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| Tax Relief on School Fees |
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Since April 2006, anyone can have a number of personal pension plans, even if you have a company pension. This is only subject to an annual limit of 100% earnings, up to £235,000 this tax year and the lifetime limit.
"As more people start families later, parents are increasingly taking out pensions to unlock the cash from age 50 (or 55 from April 6th, 2010) to pay for school and university fees" Skandia said. A lump sum of 25% can be taken tax-free from each pension.
For example, a basic rate taxpayer could pay £600 into a personal pension every month from the birth of their child. This would cost a net £480. After 18 years, the fund could be worth £134,000 in today's money (based on 7% per annum investment return and 1% per annum charges).
Of that, £33,600 could be taken tax-free - enough to help fund three years' university costs at an estimated £10,000 per year.
If this is of interest, please call the office to discuss on 01604 678470.
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