Maximising your pension fund

Despite a constantly shifting pensions landscape, planning and saving for retirement are as important as ever and a pension is a highly efficient way of saving. 

The Pensions annual allowance is the maximum amount that can be paid into a pension each tax year. This Includes contributions from yourself, your employer, any third party as well as tax relief paid to the pension. The current annual allowance is £60,000.

However, you'll only personally get tax relief on contributions up to 100% of your earnings if your earnings are less than the £60,000 annual allowance, or £3,600  - whichever is lower  - in each tax year. 

The Tapered Annual Allowance

Understanding the tapering of your annual allowance can be complex. 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, to a minimum of £10,000.

Carry Forward of unused contributions

You might be able to contribute more than the current tax year's 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

Frequent changes in Lifetime Allowance mean that advice is more important than ever. From April 2023, no Lifetime Allowance tax charge will apply to excess benefits over the Lifetime Allowance and is expected that the Lifetime Allowance will be abolished from 6 April 2024.

The value of an investment with us will be directly linked to the performance of funds you select, and the value can therefore go down as well as up. You may get back less than you initially invested. 

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. 

Please note that anything over the basic rate of tax must be claimed via the individual's tax return. 

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