Each tax year individuals in the UK are entitled to generate tax free:
For the 2019/20 tax year these annual allowances could be up to £32,500 for one individual or £65,000 for a couple. That’s £5,417 per month of tax-free spendable cash.
A - Couple generating pension and investment income using all the nil rate allowances
B - Single person's gross pension income to have the same net income
The chart shows how much gross taxable income an individual would need to take from a pension account to generate the same after-tax income that a couple could generate assuming they could arrange their investments to take full advantage of all the nil rate allowances available to them in the tax year 2019/20.
Tax issues will depend on everyone’s individual circumstances. Future tax rates, allowances, tax types and the tax treatment of savings and pension accounts will be subject to change. Tax planning needs to be a regular ongoing process.
Non UK resident tax payers will need to get advice on the taxes payable in their country of residence.