Time running out to take advantage of higher pension allowance

Individuals are advised to ensure they don’t miss an opportunity to take advantage of the current pension allowance limits before changes take effect in April.

The annual pension allowance will be reduced from £50,000 to £40,000 from April, while the lifetime allowance for pensions will fall from £1.5 million to £1.25 million.

There is a limited carry forward facility for annual allowances, and other potential planning options to protect their individual’s position, but savers should be giving thought to their position already, to make the most of the higher allowances, and also to consider how they may limit their tax bills for 2013/14 and 2014/15.

We all want a comfortable retirement, which is why it is so important to consider saving for it as soon as possible.  With the annual allowance set to fall by £10,000 in April, savers have just a short window to make the most of the current rules, and the £50,000 exemption while it lasts.

However, I would also urge people to give thought to tax planning beyond April to consider how their future tax bills may be affected as a result of these and other latest changes in the tax rules.

For further information, please contact Stuart Hinnigan at the office.