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Tools for the job: Introducing our new online pension tools
3 min read 8 Nov 21
As part of M&G plc, we’re delighted to be able to introduce a range of new financial-planning tools that can be accessed via the M&G Wealth Platform, provided by the technical experts at Prudential, starting with a suite of tools specifically to support pension-planning decisions
In developing the new-look M&G Wealth Platform, we’ve been asking advisers what they need from their chosen investment venue – and one request that came back loud and clear was more functionality to assist with client financial-planning and serving different client segments.
So we’re excited to be able to unveil over the coming months a whole range of financial-planning tools on the platform, provided by the technical experts at Prudential – starting with a powerful suite of pension planning tools.
- Explore pension scenarios - Designed to be completely intuitive to use, these pension tools allow you and your clients (including employers) – to explore a range of pension-planning scenarios to help inform financial decision-making and assess the impact of different courses of action:
- Annual Allowance Calculator – See how the Annual Allowance could affect a client – whether the standard or tapered allowance applies, as well as the amount of unused allowance and carry forward they have available (see case study below).
- Tax Relief Modeller - Understand how pension contributions could affect a client’s tax position, regardless of any further pension contributions.
- Salary Sacrifice Calculator - Explore the effect of salary sacrifice on a client’s pension, from lowering pension contribution costs or increasing contributions at the same cost.
- Protected Tax Free Cash Tool - Calculate the scheme-specific protected tax free cash amount for money purchase arrangements on or after 6 April 2012.
- Emergency Tax Tool - Calculate the impact of Emergency Tax on the payment of the Uncrystallised Fund Pension Lump Sum (UFPLS) and the first payment of drawdown where the provider will not have a tax code from HMRC.
- Defined Benefit Pension Input Amount Tool - Calculate the estimated recommended pension input amount for your client to help you work out annual allowance usage.
- Redundancy Sacrifice Calculator - Understand the effect of redundancy sacrifice from the taxable element of a redundancy payment on a client’s pension.
All the tools are reviewed regularly and updated to reflect changes in tax rates and pension allowances. Results for all these tools are illustrative only but can be saved/downloaded. They can help to demonstrate to clients their different options and give them a better understanding of what’s needed to reach their goals.
Prudential endeavours to keep the tools and results provided up to date with applicable legislation and HMRC practice. However, changes may occur without notice and the tools might not be immediately updated to reflect such changes. Accordingly, the tools do not necessarily take into account all of the possible circumstances which could impact your clients, and should not be used as a substitute for your own independent analysis and advice process.
Take a look and tell us what you think
Please log in to the platform and click on the Tools hub to try them out. We'd love to know what you think. And watch out for news of more tools on the platform soon.
Case Study
Peter is a higher earner. He has received a £60,000 bonus from his employer and wants to pay this into his personal pension scheme. However, he is unsure if he is allowed to, as it is more than the £40,000 Annual Allowance. Peter has previously breached his Annual Allowance limits for pension contributions before and used carry forward to avoid any annual allowance tax charges and wants to know if he can do this again. Peter’s employer also pays into his company DC scheme.
By using our Annual Allowance calculator, his adviser can see:
- If Peter’s earnings will taper his Annual Allowance
- If the bonus affects Peter’s threshold calculations
- How the carry forward rules affect his contribution and which years’ unused Annual Allowance he can use, if any
- What the optimal contribution level is for him in this tax year.
Using this information, his adviser can then discuss the most appropriate contribution strategy.
The information contained in this page is for professional Financial Adviser use only. If you are a private investor, please visit the Private Investor section or contact your Financial Adviser for more information.