Maximising Your Pension

Maximising your Pension Fund


Though the pension landscape is always shifting, saving for retirement is as important as ever.  A pension provides a very efficient way of saving, giving you tax relief at your marginal rate of income tax on contributions of £60,000 per tax year (from 6th April 2023) or 100% of earnings, whichever is lower. 


The Tapered Annual Allowance


Understanding the tapering of your annual allowance can be complex. 

From 6 April 2023, tapering happens if your adjusted annual income is more than £260,000.  Tapering reduces your annual allowance by £1 for each £2 that this is exceeded by, to a minimum of £10,000. 


Carry Forward of unused contributions


It might be possible for you to contribute more than the Annual Allowance of £60,000, or your tapered annual allowance, if applicable.  If so, you’ll potentially receive tax relief at up to 45% using Carry Forward.  Carry Forward can work for you if you’ve contributed less than the Annual Allowance in the previous three tax years and were a member of a UK registered pension scheme during that time. 


Your Lifetime Allowance


The need for advice is more important than ever when it comes to your Lifetime Allowance as there have been frequent changes in recent years - most recently the scrapping of the lifetime allowance altogether.  There is no knowing what changes may come in the future but we can assist with the decisions that are the most suitable for you, and advice in this area is of paramount importance.

 

Notes:

  • The levels and bases of taxation and relief from taxation can change at any time.
  • The value of any tax reliefs depends on individual circumstances.
  • Anything over the basic rate of tax must be claimed via the individual's tax return.
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