Pension Planning

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers contributions by both the individual and their employer.

Note that the unused pension allowance for a tax year may be carried forward for three years.  If not utilised within the three years it will then lapse. Note any unused pension allowance for 2015/2016 will therefore lapse on 5 April 2019.

Under the current rules the net (after tax) cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000, but there are rumours that this generous relief may be reduced in future.

Photo by Aaron Burden on Unsplash

Check your pensions savings annual allowance