In the Autumn Statement 2012 the Chancellor announced measures
related to the taxation of value in and out of registered pension
schemes:
- a reduction to the annual allowance for pension savings from
£50,000 to £40,000;
- a reduction to the lifetime allowance for pension benefits from
£1.5m to £1.25m.
Reduction to the annual allowance for
2014/15
The amount of an individual's pension savings which benefits
from tax relief is limited to an annual allowance (AA). For 2014/15
the AA is to be reduced from the current £50,000 to
£40,000, but it might already have an impact.
Although an individual's tax relief for pension
contributions is given in the tax year in which it is paid, for the
AA one has to consider the combined value of all pension savings
and benefits accruing in respect of each policy's pension input
period (PIP) ended in the tax year. This includes employer's
contributions and an amount based on the accrual of benefits in
defined benefit (final
