Planning tips for the tax year end.
From 6 April 2014, the annual allowance (the gross amount an individual can save into their pension fund each year) will decrease from the current £50,000 to £40,000. Care should be taken as, depending on the pension scheme’s own year-end, this reduced limit may already be in operation.
Also from 6 April 2014, the lifetime allowance (the total amount an individual can accumulate in their pension fund) will be capped at £1.25m; reduced from £1.5m. Any individual with a pension fund either already in excess of, or close to, this new lower limit may wish to consider making a suitable election to mitigate the risk of future tax charges.
This is a complex area and making an election may mean that no further tax efficient pension contributions can be made or accruals received. Any election must be made by 5 April 2014. If you think this may apply to you we would recommend that you seek advice from your usual Blick Rothenberg contact.