Pension premiums
There is no limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.
If total pension input exceeds the annual allowance of £245,000 there is a tax charge at 40% on the excess. This limit does not apply in the year that full pension benefits are taken.
| Maximum age for tax relief |
74 |
| Minimum age for taking benefits |
50 |
| Lifetime allowance charge |
- lump sum paid |
55% |
| |
- monies retained |
25% |
| on cumulative benefits exceeding |
£1,750,000* |
| Maximum tax-free lump sum |
25%* |
| *Subject to transitional protection for excess amount. |
2010 and beyond
The annual allowance and lifetime allowances already announced up to 5 April 2016.
| |
Annual allowance |
Lifetime allowance |
| 2010/11 to 2015/16 |
£255,000 |
£1,800,000 |
Budget 2009
Measures introduced in the budget will have an impact on the availability of tax relief for individuals with an income of £150,000 or more, change:
- The pattern of normal regular pension contributions; or
- The normal way in which pension contributions are accrued; and
- Total pension contributions / benefits accrued (pension savings) exceed £20,000 a year
In these circumstances please contact us for advice.
Notes
- Transitional reliefs are available to protect pension rights built up before 6 April 2006 by registering and protecting those rights, including lump sum rights in excess of £375,000. A claim for this transitional relief must have been made by 5 April 2009. Certain pre-existing lump sum rights of more than 25% are automatically protected.
- The annual allowance and lifetime allowance are to be frozen for a five year period from 6 April 2010.
