How tax-efficient can your pension contributions be?

A core justification for saving into a pension is that it can be the most tax-efficient method of saving for retirement. There are three key reasons for pensions having the reputation as being the most tax efficient savings vehicle: 1. Investments in a pension are fully protected from potential capital gains tax charges and there is no additional income tax to pay on dividends or interest 2. From age 55, an individual can normally take up to 25% of their pension fund as a tax-free lump sum, and 3. Tax relief is available on contributions at an individual's marginal rate of tax up to 100%...