Pension Changes Ahead
Newsletter issue - November 2010.
The Government wants to restrict the amount of tax relief claimed for making pension contributions. This will now be achieved by restricting the annual allowance for everyone to a nominal £50,000 per tax year from 6 April 2011, subject to adjustments described below.
You will get full tax relief on all your pension contributions made up to the annual allowance cap. If you have made pension contributions of less than £50,000 in any of the last three tax years, you will be able to carry forward the difference between £50,000 and your actual contribution level into 2011/12 to add to your annual allowance for that year. This carry forward of unused annual allowance will apply on a rolling three-year basis for future tax years.
The only condition for the carry forward to apply is that you were a member of a registered pension scheme for the earlier tax year concerned. If you were a member and made no pension contributions in that tax year, you can carry forward the full £50,000 of unused annual allowance. Both your own and your employer's contributions to your pension fund are deducted from the available annual allowance.