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The right allowance
KEY POINTS
- Maximum tax relievable pension savings substantially reduced – annual allowance potentially reduced to as low as £10 000 and lifetime allowance reduced to £1m.
- Important to review scope for any carry-forward annual allowance.
- Individuals could face large tax bills if they exceed either annual allowance or lifetime allowance.
- The importance of advice for individuals.
The UK government offers tax relief on pension savings but limits the amount available in two ways through the annual allowance and the lifetime allowance. There are potential tax consequences if these limits are exceeded.
From 6 April 2016 the standard lifetime allowance was reduced to £1m and for high earners the annual allowance will be further reduced. While individuals may not be close to drawing their pension savings it is important to be...
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