With so much coverage on how larger businesses are being affected by this current recession, here at 1^st Contact we wondered what consideration was being shown to the smaller and local businesses. Hence the fact that we have already posted and will continue to post relevant newsworthy articles that will pertain more to this side of our economy. 1^st Contact strongly believes that more consideration ought to be paid to this section of businesses and would be delighted to provide additional help and support if required. 

For three years, as of April 2006, the pension group has been eagerly waiting for the implementation of the simplification rule. This new formula would allow for new investment flexibility and allow persons to invest in fine art, wine and a residence in both the UK plus another country such as Spain. All of a sudden, there is interest in putting forth monies into your pension account and enjoy wine with dinner or visit your new villa. However, as with all good things, the government did a climb down and instituted a new rule. They were considering a 55% tax charge which could be applied to any individual’s pension fund whose benefits were in excess of £1.5 million.  

HRMC then provided three schemes for protecting your pension fund against this potentially devastating charge by opting for enhanced protection or primary protection or a combination of the two ideas. Any person could make an application before the three year anniversary of A-Day, this coming April 5^th, 2009.  

There will be a huge disruption if many wealthy persons forget or do not know of this protection plan due in less than 2 months. You must be aware of all legislation regarding your pension monies or you stand to lose thousands of pounds. The HMRC has a formula for figuring out what you would owe if you do not take advantage of this protection plan within the next two months. You would be wise to visit your accountant and make sure that he/she is working on your behalf. 1^st Contact will be able to discuss any similar pension related matters and they can provide assistance and support through these hard times. 

The second deadline is the same date but the year 2010, with respect to the new early retirement age rising from 50 to 55 years. This age change is so important to be aware of since it impinges on your pension fund significantly. Don’t be left in the cold with insufficient funds on which to retire at 55 years old unless you want to keep working, of course.  

Today’s middle age group is feeling the pinch with the downturn in the economy as much as anyone else. They might still have a mortgage to pay, children to educate or credit cards and utilities to pay. Just be aware that if you are 50 years of age before April 5^th, 2010, you will be able to access your pension funds, retire and enjoy many sunny days in your new villa, if that is possible. After that date in 2010 you must be 55 years of age.  

It is wise to work for a company which has a good solid pension plan. Invest in it right away from being employed and make extra contributions whenever possible. If, during these recession times, your company finds it necessary to close down, you are entitled to a week’s wages for every year you worked for them. So if you are given a final pay packet with about £5,000 or more when you are let go, use your funds wisely, and don’t go binge spending. That money plus your Jobseekers Allowance might have to last a long time before another job comes around.  

If you have any financial concerns, 1^st Contact are here to provide you with that essential assistance during these particularly tough times. Information on how to contact our company is available on our ‘home page’, where you will be able to find any relevant department quickly and without fuss.

1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.