Build your CPD with technical expertise from our CII accredited MasteClasses.

Scottish Widows Hooded woman with the caption 'Masterclass, Pension Tax Relief'

In this recorded MasterClass from 26 July 2017, we’ll share our technical guidance on pension tax relief and provide insight into many aspects of this valuable benefit including:

  • the future of tax relief
  • tax relief limits
  • how tax relief is granted within different schemes
  • effective rates available for different taxpayers
  • how different clients can maximise their tax relief.

By the end of this MasterClass you will be able to explain:

  • the difference between relief at source and net pay
  • how the annual allowance restricts tax relief
  • the proposed alternatives to tax relief.
  • Operator: Good day and welcome to the Scottish Widows Pension Tax Relief MasterClass conference call.

    This conference is being recorded.

    At this time I would like to turn the conference over to Simon Harris. Please go ahead.

    Simon Harris: Thank you very much (Marian) and good morning everybody and welcome to the latest Scottish Widows TechTalk MasterClass on Pensions Tax Relief.

    In a couple of minutes Chris Jones and Tom Coughlan from the Scottish Widows Financial Planning Team will be taking us through today’s presentation.

    The threat to pensions’ tax relief seems to be ever present at the moment. And as we witnessed at the recent election all parties saw this as a potential cost saving target using one method or another to restrict the spend and with an annual cost of the treasury around 40 billion you can see why.

    But with the government currently preoccupied in other areas, any changes to tax relief may have taken a backseat but for how long and with a budget due in the autumn we’ll have to wait and see.

    Over recent years we’ve seen a variety of methods designed to restrict the amounts of tax relievable contributions or accrual a member can benefit from with reductions to the lifetime allowance, annual allowance and the introduction of the money purchase annual allowance and tapered annual allowance primarily targeting higher earners benefiting from high rates of relief.

    But even with this in mind tax relief is without doubt one of, if not the biggest reason the majority of people choose a pension as their main savings vehicle for their retirement with employees supporting for the same reason. It is at the end of the day a very valuable benefit.

    Many of the rules around tax relief will be common knowledge for the majority and this morning’s presentation will possibly reconfirm what you already know. But I would hazard that there may be some finer points that will have been overlooked or forgotten which offers some interesting opportunity for some of your clients. And this will include areas such as planning around the personal allowance and dividends.

    And as with other pension areas the Scottish Widows Financial Planning Team offers a great deal of support on this topic. And following the presentation Paul Rutkowski will be letting you know where you can find out more information.

    The presentation is scheduled to last for about 30 minutes following which there’ll be time for any questions that you might have. And a recording of today’s presentation will also be made available on the Scottish Widows Advisor Extranet should you wish to review the content again. And CPD Certificates will also be issued.

    At this time I will now hand over to Tom to start this morning’s presentation.

    Tom Coughlan: Thank you Simon. Good morning everyone. In terms of Defined Contribution schemes tax relief is the key incentive to invest. There are other tax advantage such as tax-free growth in the fund and tax-free cash, but they are more distant benefits, so tax relief is the key reason why people use pensions for their retirement planning rather than say ISAs.

    As a higher rate taxpayer if you pay the maximum every year into your pension - the full £40,000 annual allowance - that grants you up to £16,000 in tax relief. And that some or all of that is available to every pension scheme member means that it’s incredibly expensive for the government. As Simon mentioned it’s just over £40 billion, the ’15 – ’16 tax year, and that’s net of tax receipts from pensioners. If you exclude that and also include foregone national insurance on salary sacrifice then the figure is closer to about £54 billion.

    So it’s incredibly costly and to justify that level of cost it has to be an effective incentive. And there’s clearly a debate in government as to whether it is or not. So we have a lot of speculation and uncertainty.

    But a problem with any fundamental change to tax relief is that affects so many other things. And the government would probably have to restructure the whole system or we just get these add-on restrictions such as the tapered annual allowance and the money purchase annual allowance, etcetera which are incredibly complicated.

    So complexity is a barrier to change and perhaps that’s why David Gauke who’s the Work and Pension Secretary recently announced that there would be no fundamental change to pensions’ tax relief in the immediate future. That doesn’t rule out minor changes in the autumn budget, perhaps a restriction in the annual allowance again or perhaps more fundamental changes long term. But it does suggest that pensions’ tax relief is vulnerable to change at some point.

    So if it is changed, what are the proposed alternatives beyond just reducing the annual allowance? A number have been discussed in recent years. One suggestion is to move from the current exempt-exempt-taxed system to a taxed-exempt-exempt system. So you move the tax exemption to the end which is an ISA-based system.

    This would be disadvantageous compared to the current system for a number of reasons. One, people generally earn less in retirement than during their working life. So putting the exemption at the end will make people worse off: it’s much better to be exempt from 40% tax during your working life than say basic rate tax during retirement.

    Another disadvantage is that would remove tax free cash effectively because everything is exempt at the end. And then there’s the administrative difficulty of having two concurrent systems running side-by-side.

    Then we have the Lifetime ISA which has already been put in place as an alternative retirement planning vehicle but whether it becomes the sole retirement planning vehicle, we’ll have to wait and see. It does have the advantage that some of the legislation is already in place so it can be picked up relatively easily. And it also addresses the perceived issue with tax relief which is that the general public don’t understand the term and that’s been rephrased as a bonus which is much clearer.

    There’s also a paper from the Think Tank that proposed the LISA proposing combining LISA with automatic enrolments so making it a much broader saving vehicles. So there are some recommendations there as well.

    Other simple suggestions would be to move to a flat rate system - say 30% or 20%. That would have the advantage for government of limiting tax relief for higher earners, but that system could not be introduced in isolation because higher rate taxpayers could simply use salary sacrifice to get the higher rate so that would have to be addressed as well.

    Any change of course has to be balanced against automatic enrollment policy. The intention of which is to get people into a pension so if you reduce the incentive to pay further contributions then you remove the incentive to not opt out of their workplace pension scheme. So any proposals ultimately may be determined by this.

    And then we have other suggestions such as age-related relief which in reality are probably too complicated to be picked up.

    So that’s a few of the suggestions which have been discussed in recent years. But whether the current system is in need of reform or not, it does offer a significant tax benefit. And any changes are likely to reduce the overall tax benefits available. So clients should pay the maximum contributions they can while we have this relatively generous system in place.

    And I’m now going to hand over to Chris who’s going to look at how the current system operates.

    Chris Jones: Thank you Tom. Good morning everyone. The tax relief on personal pension contributions is obtained in two ways either using relief at source or via net pay. So on the left there we have relief at source used by personal pension plans including group personal pension plans and stakeholder plans.

    Contributions are paid net of 20% tax relief. The 20% is added by the provider and then reclaimed from HMRC.

    Higher and additional rate taxpayers reclaim the extra tax via their tax returns. Tax relief is limited to 100% of earnings or £3,600 if earnings are lower. And even those who pay no tax at all can still benefit from 20% relief.

    Over on the right there we have the net pay system used by occupational schemes. The pension contribution is deducted from pay before being subject to tax. So you’re going to get full immediate tax relief for basic, higher and additional rate taxpayers and no reclaim of tax is required.

    But these schemes have big disadvantages for lower earners. Those earning less than the personal allowance pay no tax, and so can’t receive any tax relief in this way. The government is aware of this issue but as yet we haven’t seen any steps to correct it.

    Employer contributions effectively receive a marginal rate tax relief for the member. Because instead of receiving extra salary which would be taxed they receive a pension benefit free of tax. Salary sacrifice can be used to convert the personal pension contribution into an employer pension contribution. And this provides the additional national insurance savings as well as tax savings.

    The terms are slightly odd as they can appear to have the opposite meaning with net pay contributions being paid gross and relief at source contributions paying net.

    Let’s have a look at an example. On the left we have relief at source. Someone earning 2,000 pounds a month, the tax deducted and national insurance amounts to 367 pounds. And so it’s 100 pounds gross contribution so they can save 80 pounds a month net to the provider. The provider adds that 20 pounds. And the provider reclaims that back from HMRC.

    There’s an arrow back from HMRC to the member which will apply if they’re an additional or high rate taxpayer but basic rate taxpayers would have nothing to reclaim.

    On the right there we have the alternative, the net pay system, again earning 2,000 pounds a month. So the pension contribution, full pension contribution is 100 pounds gross, is deducted from their pay before tax is deducted.

    Now that doesn’t actually save NI. The full NI is deducted on the total pay not from the reduced pay. And the outcome there is the same, end up with a total benefit of 1,653 pounds.

    Tom’s now going to have a look at the annual payout.

    Tom Coughlan: Okay, thank you Chris. Yes. There are two separate limits that apply to tax relief. So the first is the limit that applies to personal contributions and the second is the annual allowance and they are two separate limits.

    So the first is 100% of your relevant UK earnings and that can be paid as a personal contribution. And if you’re in a relief at source scheme then you can also use the £3,600 de minis limit if your earnings are below that.

    So the table on the slide shows three different clients. The first one earns £1,500, the second £15,000 and the third £150,000. Client A, if they pay a contribution to a relief at resource scheme then they benefit from the £3,600 de minis limit even though their earnings are lower. Although they wouldn’t get that but if it’s in a net pay scheme because they don’t pay any tax because their earnings are within the personal allowance.

    Second client earns £15,000 so that allows them to pay a gross contribution of £15,000. And again if they pay that to a relief at source scheme then they’ll get 20% tax relief. So they’ll be paying 80% of the contribution. If that pay that to a net pay scheme though there wouldn’t be any tax relief within the personal allowance.

    Third client earning £150,000, those earnings allow them to pay £150,000 gross contribution to a personal pension scheme and they will get tax relief. However, the contribution is so high that there is likely to be an annual allowance charge which recoups some of that tax relief. But the tax relief is given initially and it’s potentially reclaimed with the annual allowance.

    Continuing that example of Client C, we’ll look at the annual allowance and how it works for that individual. So the personal contribution was £150,000 and there’s an employee contribution of £10,000 so they paid £160,000 in total. If their annual allowance plus carry forward for the year was £140,000 then there’s an excess of £20,000 and there’s a tax charge on that so effectively tax relief on £20,000 pounds has been recovered.

    Okay, just show that for a slightly different client scenario. This time a client with relevant UK earnings of £70,000 pounds so that allows them to pay that and get tax relief. They won’t get full 40% tax relief on that even though they’re a higher rate taxpayer. They’ll only get 40% relief on the amount by which their earnings exceed the 40% threshold. So they’ll get 40% relief on £25,000 and then 20% relief on the remaining 40,000 provided it was a relief at source scheme.

    If it is to a net pay scheme then they wouldn’t get the tax relief on the amount on their earnings within the personal allowance.

    So that contribution and the basic rate relief is invested in the fund. And after the end of the year there is an annual allowance check on all their contributions and accrual. The annual allowance plus carry forward was £50,000 so there is a tax charge on the excess £20,000 so they potentially got tax relief on just the £50,000 of contribution. That was just to highlight that step of paying tax relief in the first instance and then that being recouped if they go over the annual allowance.

    They are the limits to tax relief. I will now look at how much tax relief is available within those tax bands.

    The first example is of a 40% taxpayer. The basic rate relief is straightforward so 80% of the contribution is paid by the member. And then 20% tax relief is added by the provider and then reclaimed from HMRC.

    That covers the position for 20% taxpayers. For the 40% taxpayer, there’s a self-assessment claim to recover the extra tax relief. They will submit their self-assessment form to HMRC and HMRC will return the extra tax relief to them after the end of the tax year.

    So that’s the practical way in which the system works. The mechanism is hopefully shown on the slide. Under relief at source schemes before the contribution they have £50,000 of earnings. So £5,000 pounds of their earnings were above the higher rate threshold. After the contribution has been made their basic rate band is extended by the value of the contribution so the basic rate band after the contribution becomes £50,000 so instead of that segment of earnings being taxed at 40% it is taxed at 20%.

    So that 20% saving on that £1,000 grants the additional £1,000 tax relief. And adding that to £1,000 relief at source gives £2,000 pound tax in total against the £5,000 gross contribution.

    So that’s relief at source. Net pay, the contribution is deducted from income before income tax but not national insurance is applied. So then we get immediate tax relief at the marginal rate. And before the deduction, would have been in the higher rate tax bracket. That means they get immediate tax relief at 40%.

    There’s no claim required for net pay contributions. But if the annual allowance is exceeded then they’ll have to note that on their self-assessment form.

    So the example on the right there is the same, £50,000 pound of earnings and a £5,000 pound gross contribution. So before the contribution is paid they have – they suffer 40% tax on that top segment of their earnings. After the contribution is paid their income becomes £45,000. So the immediate tax relief at 40% on that.

    So base cases, the contribution is the same, £5,000 gross and the tax relief is the same as well but the mechanism is slightly different. So under the relief at source system you have to wait till the end of the tax year to be reimbursed for some of that contribution that you had paid out and you get tax relief on.

    Okay, moving onto 45% taxpayers so again basic rate relief works in the same way. And there’s also a self-assessment claim to recover the extra tax relief which in this case will be 25%.

    The mechanism is slightly different so in this case the whole higher rate band is shifted up so the income at the top that was taxed at 45% is replaced with income at the bottom of the screen which is taxed at 20%.

    So in this case the client earns £160,000 pounds. And their additional rate threshold before the contribution was £150,000 so that £10,000 segment of earnings suffered 45% tax before the contribution but not after because the higher rate band is shifted up. In its place you then have a segment of earnings just below the high rate threshold which now suffers a 20% tax.

    So that reduces their overall tax bill by £2,500. They paid a £10,000 contribution. And they got £2,000 basic rate relief initially. So you then got £4,500 tax relief against the £10,000 contribution.

    Net pay schemes again work in the same – as in previous slide. So their earnings were £160,000 before the contribution. After the contribution their income tax purposes that becomes £150,000 so they had a segment of earnings taxed at 45% which now doesn’t suffer any tax at all so that grants them the £4,500 tax relief straight away.

    All of those examples on the previous slide, they very conveniently show a contribution which is the same as the amount by which their earnings exceeded the band. And if they pay more than that then there is a restriction in the amount of tax relief available. The annual allowance caps the overall amount of tax relief available but the amount is also limited by the tax you pay at different bands.

    So a client who earns £50,000, their earnings exceed the higher rate threshold by £5,000 pound. If they paid £5,000 they get a contribution with full 40% relief. But if they pay more than that then it’s reduced. So in this case if they pay £10,000 then they get 40% relief on £5,000 pound of it, but they only get 20% relief on the rest. So in total they’ve got £3,000 tax relief on their contribution so an effective rate of tax of 30%.

    This is an important point which is often missed - the amount of tax relief you can get at different rates is limited to the amount of tax that you pay at those rates.

    Okay, one final example, so you can get 60% tax relief for those who earn between £100,000 and £123,000. They will have their personal allowance reduced. And the reduction is £1 for every £2 of income over £100,000. You can claim that back by paying a pension contribution. So under relief at source scheme the pension contribution reduces your adjusted net income which is income less personal pension contributions. Under a net pay scheme then your income is just reduced for tax purposes so in both cases it is claimed back.

    These individuals are 40% taxpayers ultimately so the tax relief works in the same way that the 40% relief does but because they get personal allowance back that grants them an extra 20% tax relief.

    For net pay schemes as well it’s the same, they get a 40% tax relief in the usual way but because they recover some of their personal allowance then they get an extra 20% relief so they get an overall tax relief rate of 60% but only because they paid income tax at that rate on that segment of their earnings.

    Okay, I’m now going to hand over to Chris who’s going to look at tax at the end versus the tax relief paid in.

    Chris Jones: Pensions are taxed on the EET tax basis. And this implies that the tax liability on decumulation equates to the tax relief received during the accumulation phase. And this is rarely the case. It’s because pensions have two key advantages. Up to 25% of benefits or 25% of the lifetime allowance are usually available as tax free lump sum. The other advantage is the tax paid on the pension income is much lower than tax relief on the amounts paid in because income in retirement is often much lower than that during working life.

    For example someone who’s earning 50,000 paying 5,000 pound contributions, they could – get tax relief of 40% while they’re working. When it comes to pay their pension income say perhaps 25,000 pounds a year, 11,500 of that would be tax free, the rest only subject to basic rate tax meaning that the average tax is considerably less than the amount of tax relief that they received when they made contributions.

    And now we will look at four areas of maximizing tax relief that you can help clients with. The first one is company owners. Small owner/director, companies can reward themselves in any combination of salary, dividend or employer pension contributions. Employer pension contributions are not subject to tax or NI on the employer or employee. And can be a very tax efficient way of extracting profit.

    The ultimate benefit would depend on tax paid on the pension income when it’s actually withdrawn. Perhaps as described previously - this will often be lower than would be paid if salary or dividends were taken earlier instead.

    On the screen there is an extract taken from our calculator that is available on the adviser section of the web site. This can be used to look at effective rates of tax, on any combination of salary, dividends or pensions.

    A second area is where clients are subject to the tapered annual allowance and using carry forward to reduce threshold income. Personal pension contributions reduce threshold income when looking at whether a client is subject to tapered annual allowance. When someone’s adjusted income is in excess of £150,000, it’s possible to reduce that threshold income to below £110,000 by making a large personal contribution.

    But in order to do that at least some carry forward will be required. The contribution will need to be greater than 40,000 pounds. So making a contribution in excess of 40,000 pounds can have a slightly odd effect in ensuring that their annual allowance remains of 40,000 pounds. This Usually works best where someone exceeds the 150,000 adjusted income threshold on a one-off basis as they are then more likely to have the carry forward available in order to use this planning.

    The third area is those that have variable income. For those who have variable income that fluctuates around a tax band can maximum tax relief by making contributions when income enters the higher band. Most commonly this would be those who fluctuate around the higher rate perhaps due to annual bonuses. If they make contributions on the amount that falls into that band they make sure they receive 40% relief on all their contributions because they’re maximizing that relief.

    A fourth area is those with dividend income that fall into the high rate band. Here a client can achieve even greater than 40% relief. This is because they receive both a 20% relief at source on a contribution plus when the basic rate band is extended as in Tom’s example earlier, here the dividend income moves from being taxed at 32.5% to 7.5%. So you get your 20% tax relief at source and then a tax savings of 25% on that dividend so they’re maximizing tax relief again.

    Here are some additional points. Tax relief is not available on personal pension contributions beyond age 75. Many schemes provided only accept tax relievable contributions. So this often means that those over 75 and those not UK residents can’t make contributions into their schemes.

    Tax relief is available on third party contributions, all benefits are accrued to scheme member and they’re all taxed on the basis as if it was a member is making that contribution so at their own rate.

    And remember there’s recycling rules for those considering using any tax free lump sums to contribute further. Recycling can be caught by unauthorized payment charges. And that was a subject of a recent Master Class so have a look at that if you interested in that subject.

    I’ll quickly look at self-assessment where you claim this tax relief, so SA-100 the main Tax Relief Form on Page 6 there in Box 1, you put any contributions into your PPP. Box 2 any RACs. Box 3 is where a client’s making gross payments, for example if they make a one-off large lump sum to their occupational pension scheme that may be paid gross.

    Then Supplementary Form SA-101 which is required where you have to pay the annual allowance charge and that’s in Box 10 there so any annual allowance excess but remember you don’t have to use that simply if you’re using carry forward. It would only be where your contribution exceeds any annual allowance in the current year and any available carry forward and that’s in the three previous years.

    If you want to use scheme pays, that goes in Box 11 there. Usually only available, if you’ve exceeded 40,000 pounds allowance and isn’t usually available where you have just exceeded the tapered annual allowance or the money purchase annual allowance.

    So that’s all our technical content. Paul’s going to tell you about our other support material we have available.

    Paul Rutkowski: Great. Thanks Chris. Good morning everyone and thanks for your time this morning.

    Just briefly to start with I’d like to just do a quick introduction myself as the majority of you won’t know me. So my name is Paul Rutkowski. And I’ve taken over the leadership of the Financial Planning TechTalk Team from Sandra Hogg. I’m really excited to have the opportunity to work with the team. And I think more importantly obviously for our team to work with all of you.

    I’ve got three slides this morning to signpost some of the fantastic resources that the team create for you. But what I’d like to say though is that it’s so important that the material we create hits the mark. We want to make this material as accessible and simple as you possibly can make technical material and we want it to be as relevant as possible to you with the technical topics that are top of your agenda.

    So that end we really, really love to receive your feedback on the work we do and how we can evolve and improve it to enable you to digest it quickly and make use of it with your clients. So I really do urge you if you can get in touch, feed us your ideas and we will do our very best to incorporate them going forward.

    So returning to the slides just to run through some of the material that we have, the first slide here is around our two most recent TechTalk Editions that are available online through our Extranet site, the June edition and the Defined Benefit Special Edition.

    I’m sure you’ll all be extremely aware that defined benefit advice is receiving a lot of focus in the press at the moment. And our DB Special Edition which is some terrific content is only available in soft copy from the web site. So if DB advice is an area of interest to you please go and download the Special Edition.

    So moving on then, in terms of our Advisor Extranet all our material is available on the web site. We’ve currently re – oh sorry. We recently revamped the financial planning area where you can find TechTalk, the MasterClass replays and other material so if you haven’t visited the new web site it’d be great if I can encourage you to do so.

    And also as I said already if you’ve got any feedback back on how we can make it simpler for you to use and make the material easier for you to find then please do let us know. We really do want to make our site the one that you want to come to for your help with technical advice and expertise.

    So finally then on the site we have our Techtalk MasterClasses and the replays of them. We’ve also got a raft of tools on the site for example our carry forward calculator and our retirement planning support material and we have lots of retirement planning articles for you as well.

    Right, so that was just a quick skip through of some of the material that we’ve got. As I say please do give us your feedback. But for now, I’ll hand back over to (Marian) for some Q&A. Thanks very much.

    Operator: Thank you. To ask a question via the web interface simply type your question in the Ask the Presenters Question Box and click Send.

    Chris Jones: Okay. Yes, we have a few already here. So okay, I’ll start taking those. So with employer contribution over 75 still qualifies for tax relief. Yes, so the restriction on 75 only applies to personal pension contributions so there’s no cut off for employer contributions so yes, if they’re still working in the business there’s no reason why you couldn’t make a pension contribution for someone over 75. You need to make sure obviously your provider accepts over 75 contributions because a lot will just cut off for age 75.

    Tom Coughlan: Yes. There’s a question here regarding non-residents continuing to have contributions paid via salary sacrifice after the five years.

    Yes, that is obviously fine because they’re employer contributions. So the earnings limit is not relevant and it’s an employer contribution. So but whether they get the same tax benefit overseas, as in the UK, we can’t really comment on that. But the £3,600 and the earnings limit don’t apply because you converted that into an employer contribution.

    Chris Jones: Yes. So I’ve got one here on third party contributions who receives the tax relief. Yes, so the member receives it in exactly the same way as if they paid that contribution. So if they’re a basic rate taxpayer they would only receive 20%. If they’re a non-taxpayer they can still receive 20% if they make it into a relief at source scheme. And if they’re a high rate taxpayer they could reclaim that tax relief.

    Tom Coughlan: Okay here’s another question here about forgetting to claim your higher rate tax relief and how far back you can go. You can certainly go back and claim a high rate tax relief if you missed it. And I believe it is up to four years that you can go back and do that.

    Chris Jones: Yes. So if someone is subject to the money purchase annual allowance. And using the full amount in their own PP could they contribute £3,600 to their wife’s or pension and get tax relief? Yes, that’s a good planning point.

    So the only restriction applies to the individual but for the third party it’s tax on that third party. So you could still make contributions for spouses or children.

    Tom Coughlan: Okay another question regarding the money purchase annual allowance. If a client takes tax free cash only does the money purchase annual allowance come in?

    No, it doesn’t. If you just take tax free cash that is not a trigger for the MPAA. But if you do take any drawdown income, as you must at least designate to drawdown, then that would trigger it.

    Chris Jones: Okay. Good. Another one here, can carry forward be used with the money purchase annual allowance? No, unfortunately not. So once you trigger that from the moment you trigger the money purchase annual allowance carry forward is not available. So yes, it’s one of the key reasons why you’ve got to be really careful to make sure you don’t trigger that by accident.

    Chris Jones: Yes. There’s a broader one asking if you see any changes coming in terms of salary exchange in terms of pension, well we – you can’t ever say we won’t. But we’ve had a sort of clear indication it’s possible. They reviewed salary exchange. They’ve done a full review of it and they decided that it was okay for pensions.

    But it is very expensive so it’s possible that will change. But every indication we’ve had so far at the moment is that it will be available for foreseeable future.

    Tom Coughlan: Yes, so can you confirm the situation regarding the budget proposal in relation to reduction in the MPAA?

    Tom Coughlan: The budget did say that it was to reduce to £4,000 and then the delay of the legislation suggested that might not be the case, but we have had confirmation now that that £4,000 pound MPAA will be effective from the 6th of April this year.

    Chris Jones: Okay, we’ll take one more. And any questions that we haven’t covered, we will get back to you individually later on.

    But last question does taking back some benefits from a DB scheme trigger the money purchase annual allowance? No that’s one good thing. So if you reach your retirement age in your DB scheme, take those benefits you can still contribute to a money purchase scheme.

    Okay back to Simon.

    Simon Harris: Okay thank you very much and thank you for all your questions and indeed to Tom and Chris for answering those. As Chris has said if we didn’t get to any of your questions we will answer them via email.

    As I mentioned at the start much of the presentation you’ve seen and listened to today may have already been clear. And if that is the case I hope this is actually a useful refresher. But on the other hand there may have been something in there that alerted or indeed reminded you of a feature of the current tax relief system which could help a client or two.

    Tax relief will continue to fall under the microscope due to the current cost of the treasury particularly at the higher rate. It is yet to be seen if the current government will make any radical changes but for the time being we need to keep abreast of the current rules and restrictions and help members save in the most effective manner.

    Please make use of the material available from the Financial Planning Team which Paul highlighted earlier. And if you need any help or any additional material speak to your Scottish Widows contact around how the proposition, the Scottish Widows proposition can help with planning ideas Chris and Tom have covered of today.

    It’d be good also to get your feedback on what are the topics you’d like to see covered in future MasterClasses and at the end of today’s presentation you’ll see a box pop up on your screen which will ask you a question about future subject matter. If you could take the time to respond to that we would be very grateful.

    There were a few technical hitches in mid presentation which I do apologize. If there are any questions you have on those slides, you missed any of the points on those slides again let us know. As a reminder however a recording of today’s session will be placed on the Scottish Widows Advisor Extranet for future review and indeed if you wish to review any of the other recordings from previous MasterClasses which Paul highlighted earlier on.

    As a reminder CPD Certificates will be issued and finally, my thanks again to Chris and Tom for taking us through the slides today. Thank you for joining and that concludes today’s presentation.

    Operator: Thank you. That will conclude this conference call. Thank you for your participation. Ladies and gentlemen you may now disconnect.

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