Although the following case study relates to an actual example, where we have helped our clients by providing solutions to their financial problems, the names and figures have been changed for confidentiality purposes. 

Caroline is a C-suite executive with a FTSE-100 financial company, who came to Lucy when she discovered that her annual pension allowance had been reduced to £4,000 and she was about to receive a very large tax bill from HMRC.  

If an individual earns more than what is known as the Threshold income, from all sources of income, they will be affected by what’s known as a ‘Tapered Annual Allowance’; this reduces their Annual Allowance on a phased basis from the then maximum of £40,000 down to a minimum of £4000, depending on the tax year and total earnings.  This is what had happened to Caroline, and she initially hadn’t realised.

Lucy’s approach is always to devise strategies that will ensure best outcomes for her clients.  In Caroline’s case, this means that her employer now pays direct to her what they would have contributed to her workplace pension, once her annual pension allowance of £4,000 has been exceeded, and this cash is then paid into her and her husband’s ISAs.

Lucy has here turned a tax liability into a tax efficient strategy, maximising the allowances available to Caroline, and building a plan that will allow Caroline to retire in 10 years’ time.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.