Summer 2015 Budget Announcements
What are the main pension changes?
There are three main pension tax changes which the government will introduce from 6 April 2016 to partly help fund changes to the inheritance tax threshold. The main changes include:
- The standard lifetime allowance is changing, (the limit on the pension savings you can build up over your entire working lifetime before a tax penalty applies). The allowance is reducing from £1.25 million to £1 million at 6 April 2016.
- The annual allowance in 2016 is changing, (the amount of your annual pension contributions that you can pay in tax free). When your adjusted income (total taxable income less certain tax relief), exceeds £150,000 your annual allowance will not be £40,000 (as it is now) but instead will be tapered down to as low as £10,000 (depending on your income).
- A statutory alignment of Pension Input Periods (PIPs) to the tax year over 2015/16. The PIP is the period over which the amount of pension saving (pension input amount) under an arrangement is measured. *Please note, the PIP for the Telefónica plan is already in line with the tax year.
Please click on the links below which will help explain the changes and they could affect you: