You may have noticed coverage in the press that the annual allowance for pension contributions – ‘pension input amounts’ – will reduce from £50,000 to £40,000 for the next tax year… having already reduced from £255,000 to £50,000 in April 2011.
The precise rules run to several pages of HMRC guidance and you will be liable to tax if you breach the annual allowance amount. Your pension scheme administrator cannot advise you, although they will supply a lot of the information we need to advise you. If you are affected, you may have choices; curtail your pension or accept the tax and you may need our advice about that.
Do bear in mind that, for members of final salary schemes, your annual pension input amount is considerably more than your employee contribution to the scheme.
We can help by calculating your pension input amount. If this exceeds the annual allowance, we will explain and quantify your options so that you will have time to decide what to do about the over-contribution.
We will also be able to flag potential problems in future years. If you would like us to advise you, or have any further questions, contact us on firstname.lastname@example.org. Our fixed fee for this work is £195+VAT to calculate your pension input amount, then £195+VAT if you exceed the allowance and need to consider the options.