Pension recycling

Taking tax-free cash from your pension fund and investing it back into your pension can be an easy way to pick up extra cash, says the Mail.

This is because tax relief is added to your contributions. But nobody is yet sure how HMRC will apply its ‘anti-avoidance’ rules that can result in high penalties for people who do this on a large scale or regularly. In theory, anyone drawing more than £7,500 in tax-free cash and contributing to a pension scheme at the same time could be caught by these rules.