Government change pension contributions
An announcement by the Treasury this morning has confirmed that the annual pensions allowance is to be reduced to £50,000.
The total lifetime allowance for pensions (the total value of your pension before tax is applied) is to be reduced from £1.8 million to £1.5 million.
The changes are to be introduced to save an estimated £4 billion per year.
It is anticipated that 100,000 people will be affected by the change. Most of the people affected earn over £80,000 per annum.
The changes were more generous than anticipated and have been welcomed by the association of British Insurers.
The change to the annual allowance will take place in April 2011 and the lifetime allowance will be adjusted in 2012.
This still leaves plenty of opportunity for people looking to make pension contributions. The need for pension advice and tax planning advice has never been greater.
