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MASSIVE TAX RELIEF SAVINGS TO BE MADE ON LIFE INSURANCE PREMIUMS, ADVISES MONEYNET.CO.UK

Big savings to be made on little-known life premium loophole

CONSUMERS can save up to 40 per cent on monthly life insurance premiums with a Pension Term Assurance policy, according to online data comparison service Moneynet.co.uk.

Under little known new rules which came into effect with the Government’s A-Day pension shake-up earlier this year, it’s now possible to take out a ‘pension’ life policy - without having to pay any pension contributions - and take advantage of big tax relief savings deducted at source.

“This presents an unmissable opportunity to make savings for many people, whether they already have life insurance running or not,” said Moneynet chief executive Richard Brown.

“If you are looking for a new policy now is an excellent time to apply, and for those with existing life cover it may be possible to rearrange cover at a cheaper price under these new rules*,” said Brown. “However, there are some restrictions which apply, particularly for higher earners, so we would recommend that consumers receive advice from an appropriately qualified professional who can search the market, compare prices and advise on suitability.”

Policies set up under these new rules qualify for tax relief at the policyholder’s highest rate of tax. In practice, this means that 22% is deducted from the premiums paid, with higher rate taxpayers being eligible for an additional 18% through their annual tax return.