Over the last few years pension savings have been hit hard by changes to tax breaks. Only a few years ago taxpayers were able to make contributions of up to £255,000 per year and enjoy tax relief.
In the current tax year this has been reduced to £40,000, but things are expected to get a lot worse.
The super higher rate taxpayers have already been told that their super high tax relief will be removed from April under a complex system. In addition, the lifetime allowance [the amount one may contribute into a pension scheme] will be reduced to £1m. That sounds like a lot but £1m will only roughly buy an annual pension of £25,000 per year, which is pretty modest.
Then there are the unknown changes due in the budget in the middle of March. We don’t know what they will be, but the rumours are that there could be a complete abolition of pension tax relief or a restriction to basic rate relief only.
Our advice, speak to us soon and make sure that your personal circumstance have been considered to avoid an expensive mistake.
Jason Seagrave | Partner | Seagrave French
0115 941 5193 | firstname.lastname@example.org