The annual pensions allowance is set to change on 6 April 2016 if your “threshold” income exceeds £110,000 and your “adjusted” income exceeds £150,000. For most people the annual allowance is £40,000, but should your income exceed the above limits the allowance (which includes employer’s and employee’s contributions) will be reduced by £1 for every £2 of adjusted income over £150,000. The minimum annual allowance will be £10,000, which will apply to those with adjusted income of £210,000 or more. The table below gives examples of the annual allowances due.
Adjusted Income Annual Allowance
£150,000 or less £40,000
£210,000 or more £10,000
Should you feel that your income for 2016/17 may exceed £110,000, you need to seek independent financial advice as a matter of urgency.
For further information please contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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