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What are the tax benefits of a pension?

A pension is a tax-efficient way to save for your retirement.

You can benefit from tax relief on personal payments into your pension, up to your allowed limit.

Pension investments are free from income tax and capital gains tax, so you won’t pay tax on any dividends from shares. You also won’t pay capital gains tax on any profits made from the investments within your pension.

Just so you know, when it’s time to take money from your pension, there’s a limit on the total amount of tax-free cash you can take. You can normally take up to 25% tax-free, or a maximum of £268,275 across all your pensions. The rest is taxed like any other income.

To find out more, have a look at gov.uk.