Now that the dust has settled, we’ve been able to take a look in detail at some particular issues, and our first one is the pensions changes.
There are two main changes that will impact on our client we believe.
Firstly the total amount that can be saved in a pension scheme limit has been abolished, previously it was just over £1m with very heavy tax rates for additional savings [an eye watering 55%]. Now there is no limit, so this opens up a lot of tax planning opportunities for taxpayers.
Secondly the annual contribution limit has been increased to £60,000 from £40,000, again allowing for more funds to be saved into a pension and enjoy the usual benefits.
One word of caution, the tax-free amount that can be drawn out of a pension, which was 25%, has been restricted to a maximum now of £268,250, this is based on the previous lifetime allowance.
We suggest that clients think again about their pension positions and maybe make an appointment with us to discuss the matter.