Its never too late to consider further contributions into a pension arrangement. Even if you’re close to the age at which you might want to start to draw benefits.

Sure, there might not be much time for the extra contributions to grow in value within the investment fund but there are some truly excellent strategies to make much more of your money than you might imagine.

Take, for example, a very simple strategy for higher rate taxpayers older than 50 (age 55, from April 2010). A £10,000 contribution can attract tax relief up to £4,000. This brings the net cost down to £6,000. The investor then immediately takes a tax free lump sum of 25% of the fund: £2,500. Thus the net cost is reduced to just £3,500 but £7,500 remains in the fund: an immediate profit of more than 100%! There’s quite a few ‘variations on the theme’, including re-investment of the tax free cash putting the contributions in to a self invested personal pension and operating a stock market portfolio inside the pension rather than outside of it.

Personal pensions can also, in appropriate circumstances, be used to assist inheritance planning. With proper planning, death benefits can be directed to selected beneficiaries with the option of changing those selections depending on changing circumstances and, perhaps, personal relationships.

On a more fundamental level many people realise that substantial additional pension contributions, even within just a few years of wanting to draw benefits from the fund, can be a highly tax-efficient method of providing retirement income. This can be especially beneficial if investments are held in a properly-constructed portfolio.

If you’re not sure whether pension contributions are right for you….