Pensions allowance cuts loom

Tax Comments Off on Pensions allowance cuts loom

On 6 April 2014, the annual and lifetime allowances for pension contributions will be reduced. It’s likely to affect a greater number of individuals than what Government figures suggest, according to pension provider Standard Life.

What’s changing?

• The maximum value of pension savings an individual can accrue in their lifetime before a tax charge is triggered will fall from £1.5 million to £1.25 million

• The maximum amount you can make in pension contributions each year without attracting a tax charge is reducing from £50,000 to £40,000.

Who will be affected?

According to Standard Life, the change to the lifetime allowance will immediately affect 30,000 people, and 360,000 in the longer term. This is more than the one per cent of pension savers that HMRC originally envisaged would be affected. Nearly £250 billion worth of accumulated pension savings could be at risk.

For more information and advice please contact John Elliott.