Despite the ever changing pensions landscape, pension planning and saving for your retirement are still as vital as ever. Pensions still remain highly efficient, offering tax relief at your highest rate of tax on your contributions, assuming that anything over the basic rate of tax is reclaimed via the individual's tax return, and therefore are an important part of your overall planning.
- Tapered Annual Allowance With effect from 6 April 2016, the annual allowance of £40,000 per annum will potentially be reduced for high earners. If you have total adjusted income in excess of £150,000 per annum, you will see your annual allowance reduced by £1 for each £2 this is exceeded, to a minimum of £10,000. This is a very complex area and so it is vital that appropriate advice is sought.
- Carry Forward of unused reliefs You may be able to contribute in excess of the Annual Allowance of £40,000, or your reduced annual allowance, and receive tax relief at up to 45% using Carry Forward for example, if you have contributed less than the Annual Allowance in the previous three tax years. As this is a potentially complex area, particularly where Defined Benefit schemes are concerned, advice should be sought.
- Lifetime Allowance reducing The reductions in the Lifetime Allowance to £1 million with effect from 6 April 2016 means that this is potentially going to affect more people. This means that advice is more important than ever to ensure that you are optimising your retirement planning, and are fully up to speed with the latest Lifetime Allowance protection opportunities.
The value of a pension with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax reliefs depends on individual circumstances.