If you did not use the whole of your 2013/14 pension Annual Allowance, you have just weeks remaining to benefit from rules which allow you to carry forward your allowance from that year.
If your earnings, including any employer pension contributions, have been more than £150,000 this tax year, your Annual Allowance of £40,000 – within which contributions are topped up at your marginal rate of tax – will have been reduced by £1 for every £2 you earn over £150,000 up to a maximum of £30,000. This means your Annual Allowance will be as little as £10,000 if you earned more than £210,000 this year.
The reduced annual allowance means that it is especially important to make use of any unused Annual Allowance from 2013/14, which will be worth £50,000, less the value of any contributions made in that year. However, you only have until 5 April 2017 to do so.
Tax relief on pensions for those earning £150,000 or more has been a frequent target in recent Budgets and so it is important to look to use any unused Annual Allowance as soon as possible.
If you think that you might be affected by these changes to the pension Annual Allowance it is important that you act fast to ensure you do not fall foul of the new rules.
At Milsted Langdon we offer a comprehensive Pensions Review Service through our regulated advisors at Milsted Langdon Financial Services who can help you understand your pension and any potential tax liabilities that may arise from it.
We will deal with any questions you have regarding pensions and advise you on your options for achieving a better retirement.
To find out more about or tax planning and pension services, please contact us.