George Osborne has been challenged on some of the recent changes he has made on tax relief for those paying into pensions, with some claiming it is nothing more than ‘a stealth tax’ (Financial Adviser Bristol).
The new changes are expected to raise close to £6bn for the treasury and will come into effect from April 6th 2016 which will coincide with the lifetime allowance being reduced from £1.25m to £1m.
Under the revisions, the annual allowance (the amount and individual is allowed to pay into a pension whilst receiving tax relief) will be reduced for higher earners. The annual allowance currently sits at £40,000 but for those earning in excess of £150,000, their annual allowance will be reduced by £1 for every £2 income above £150,000 down to a lower threshold of £10,000. However, those paying into pensions need to consider more than just their salary as the the calculation will also include other sources such as company benefits, rental income, investment income etc.
There has been some speculation that should higher ranking individuals in firms stop paying into pensions, this may send the wrong message to other staff members who may follow suit and thus threaten the future of company pension schemes.
Pension contributions, tax relief, the annual and lifetime allowances can be confusing and it is important to seek well informed financial advice. Should you wish to discuss any of the above, please call one of our pension transfer specialists who will be happy to give you a free initial consultation.
Financial Adviser Bristol
If you would like to speak with one of our Independent Financial Advisors and potentially receive financial advice, please contact us on 0117 923 7652. We are based in Clifton, Bristol but we are happy to service clients from across the UK and we provide free initial meetings at our client’s convenience.
Churchill Wealth Management Limited is located at 13 Alma Vale Rd, Bristol BS8 2HL, United Kingdom.
About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.