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Unleash the Yeast: Personal Pensions – The best thing since sliced bread…

By admin
01 Feb 2024

In 1912, in Iowa USA, Otto Frederick Rohwedder introduced the world to one of its greatest conveniences – a single loaf, bread slicing machine. Little did he know that more than seven decades later, in 1988, another financial innovation would come along, making waves and turning out to be the best thing since those neatly sliced loaves – Personal Pensions!

“Pensions, really?” I hear you cry. Yes, dear reader I am serious and if you set aside your perfectly sliced thick cut granary toast, I will tell you why.

Much like the convenience of sliced bread, Personal Pensions have become a staple in securing a prosperous financial future. Let’s dive into the doughy details and explore why Personal Pensions are earning their crust as the go-to place for the savvy long term planner:

1. Tax Relief on Contributions – The butter and jam on your financial bread

Contributing to a Personal Pension comes with a delectable 20% bonus – aka Tax Relief! When you invest in your pension, the government adds a dollop of tax relief to your contribution. Basic rate taxpayers will get a 20% top up straight into their pension with Higher and Additional rate taxpayers entitled to a further 20% or 25% rebate directly i.e. straight into your bank account or via your pay courtesy of a more generous tax code (limits apply).

It’s like getting a little extra filling in your financial sandwich, making your money work harder for you.

2. Tax-Free Investment Growth

The growth of your investments in a Personal Pension is tax-free. Any gains made on the investments are exempt from Capital Gains Tax and any dividends or interest received into the pension will be shielded from Income Tax. This tax-free growth compounds over time further adding to the total return on your pension. It’s a tax-efficient way to let your financial yeast do its magic.

3. Outside of your estate for Inheritance Tax – No sneaky hands in the cookie jar

One of the advantages of Personal Pensions is that in most cases they are outside a person’s estate when it comes to inheritance tax. A Personal Pension ensures that if you don’t make use of the pension assets yourself, your hard-earned dough goes to your loved ones without being nibbled away by inheritance taxes.

4. Long-Term Growth Prospects – Rising Like a Perfect Loaf

Personal Pensions are designed for the long haul, offering you access to a wide range of investments with the prospect of sustained growth over time. Just like a well-baked loaf rising steadily in the oven, your pension has the potential for impressive long-term growth, ensuring a hearty financial future.

Remember with return always come risk. Investors are reminded that the value of an investment and the income received can go down as well as up. Therefore, you may not get back the amount they invested.

5. Deductible as a Business expense – Saving Corporation Tax

That’s right business owners we haven’t forgotten about you. For businesses, contributing to Personal Pension is classed as a business expense meaning a contribution from your business account isn’t just about securing your future but also about some serious savings on your Corporation Tax bill.

So, there you have it – Personal Pensions, the financial equivalent of sliced bread! With tax relief, tax-free growth, inheritance tax benefits, long-term growth prospects, and corporate tax savings, personal pensions are proving to be the perfect blend of financial ingredients for a secure and prosperous future. Don’t be left with stale financial choices – savour the benefits of Personal Pensions and let your money rise like the perfect loaf!


Please note that this does not constitute financial advice or a personal recommendation, limits and restrictions apply and personal circumstances may vary. Income tax is often payable on a proportion of any money withdrawn from a pension. You should seek financial advice before take action on Personal Pensions.

If you would like an introduction to Charles Chami then please drop us a line

This article written personal pensions expert Charles Chami

Author: Charles S Chami Director & Independent Financial Adviser, Glamis IFA

Charles has over 15 years financial services experience including five years at Morgan Stanley where he specialised in Fixed Income, Commercial Real Estate and Asset Management. Charles has a BA (honours) degree in Business/Economics and holds the Diploma in Financial Planning, The Certificate in Securities Advice & Dealing and The Certificate in Mortgage Advice. Charles is a member of the Chartered Insurance Institute, the Personal Finance Society, the Society of Mortgage Professionals and was also the 2017/18 President of the Bristol Junior Chamber of Commerce.

About Glamis IFAP:


Glamis Ltd was founded in 1983 and started trading in 1985 as a management consultant to small businesses.  Later Glamis diversified into personal financial advice. During this time, Glamis has continued to provide a top class, tailored service to its clients as it evolved into the company it is today.

During the past 30 years Glamis has been authorised and regulated in the UK, becoming a member of FIMBRA (1988), the Personal Investment Authority (1994), the Financial Services Authority (2001) and most recently the Financial Conduct Authority as the new regulator of the UK Financial Services industry in 2013.

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