Retirement & Pensions

Annual pre-Budget Pension Tax Relief Speculation

By February 14, 2020 No Comments

The FT reported at the weekend that restricting pension contribution tax relief to 20% would raise “more than £10bn a year”; a figure which may not be easy to overlook by a revenue-hungry Chancellor at the beginning of what could be a five-year Parliament, and would provide a not inconsiderate sum towards the cost of HS2! 

There are some hurdles which would need to be overcome to make this change, not least the issues of higher earners in the NHS, however to make sure you do not lose out on tax relief at your highest marginal rate of income tax, we urge you to make any pension contributions as soon as possible to maximise this valuable tax relief, particularly for high and additional rate income tax payers. 

 Remember also that this tax year is the last year you are able to carry forward any unused Annual Allowance from the tax year 2016/17, subject to you maximising use of the current year’s Annual Allowance (£40,000 for those with income less than £110,000 and tapered for those with income over £150,000 to £10,000 if your income is over £210,000). 

Please get in touch as soon as possible to discuss your options to make sure you don’t miss out if any changes are announced on Budget Day, 11th March 2020.