Letter: There’s more to life than pension saving

Terence P O’Halloran

Soon our younger generation will be putting 31 per cent of band earnings, hand in hand with their employer, into what is effectively national insurance plus auto-enrolment. The barmy army just never stop do they?

I am retired. I am financially independent. I did put money away into a pension, in addition to national insurance, but I really did not start putting significant sums into pensions until I attained my later years and my mortgage debt had reduced with inflation.

Life insurance, income protection and family protection were all priorities well before pension, and necessary as Rosemary (a client of mine) would testify when her husband died in his early 40s, leaving her with three children. The mortgage was paid off and £40,000 a year is available for those children until each of them reaches age 21. If they had put their money into pensions, I cannot begin to imagine what the situation in their family would be like. Her husband earned £26,000 a year as a shop manager.

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But the government of course has a passion for people’s pensions. Just look at the 55 per cent tax that is levied as soon as you start to draw your pension and have the temerity to die. The fact that you have received 20 per cent tax relief seems to entitle government to 55 per cent because you were probably “a higher rate taxpayer,” according to John Whiting at HMRC.

The man from Jelf needs to think again, or maybe he is just earning too much to notice 95 per cent of the population earns less than £31,000 a year on which they pay tax, national insurance plus auto-enrolment and live.

Terence P O’Halloran

Chartered financial planner