The government today followed up its previous round of pensions reforms by developing the framework within which savers can draw their pension benefits flexibly as well as making further changes to the pensions tax rules.
The government has estimated that higher-rate tax relief on pension contributions in 2013-14 cost the Treasury in the region of £34.3 billion, and, inevitably, this disproportionately favoured high earners. In an effort to balance the books, the government has therefore announced that from April 2016, people earning over £150,000 will have the amount they can pay into a pension tax-free reduced. From April 2016, therefore, the annual allowance applicable to individuals with income above £150,000 (including in respect of any pension contributions made by or on behalf of them) will be adjusted so that for every £2 of income above £150,000, the limit on the amount of tax relieved pensions savings they can make will be tapered … Continue Reading ››
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