Worth dumping cash into pension before 40% rate dropped ?
Discussion
PurpleMoonlight said:
swerni said:
Is the tapering of contributions on hold as well?
Not that I am aware of.I understood there were a few potential changes, the reduction of allowances (Ie 40k down to 10k if you earn over 110k) and changed to potential relief (I think one suggestion was moving to fixed rate). I'm sitting here and all I can gather is there is a leak saying some of the leaked pension changes might not happen. Nothing like facts to work from!
PurpleMoonlight said:
Tapering down of the annual allowance was part of last years budget and nothing to do with this years speculation.
He might lower the income limit for it in this years budget of course.
Just to be clear - are you referring to the 50k limit on annual contributions becoming 40k etc or the 'earn over 110k and we start taking even more away down to 10k max contribution' (the numbers might not be bang on but hopefully the principal is understood). He might lower the income limit for it in this years budget of course.
My employer has only just written to me on the subject as it screws up all sorts of things like matched contributions and so on which made e think it is related to this years changes.
PurpleMoonlight said:
JonV8V said:
the 'earn over 110k and we start taking even more away down to 10k max contribution'.
This.So those earning 100k can stick 40k in but those earning 200k who might be able to afford sticking 40k in can only stick 10k in and get any form of tax relief.
Thats hardly an incentive for higher earners to stick any more into a pension.
JonV8V said:
Thanks
So those earning 100k can stick 40k in but those earning 200k who might be able to afford sticking 40k in can only stick 10k in and get any form of tax relief.
Thats hardly an incentive for higher earners to stick any more into a pension.
It's not meant as an incentive.So those earning 100k can stick 40k in but those earning 200k who might be able to afford sticking 40k in can only stick 10k in and get any form of tax relief.
Thats hardly an incentive for higher earners to stick any more into a pension.
It's mean as a restriction of tax relief.
One in place it's an easy move for a Chancellor to reduce the income level at which tapering is applied. A lot of people use pension contributions to reduce income to below £100,000 because the effective tax rate for income £100,000 - £120,000 is 60%.
The danger of using an arbitrary figure of £150,000 reminds me. The technical definition of "Adjusted Income" is the important thing to bear in mind here - it doesn't relate *just* to salary.
The total amount of income for the tax year on which you are subject to appraisal includes "salary, bonus, profits from self-employment, benefits in kind, pension income (including uncrystallised funds pension lump sums), income from property, savings, dividends and taxable lump sum death benefits (post 5 April 2016)".
Property income etc, anyone?
The total amount of income for the tax year on which you are subject to appraisal includes "salary, bonus, profits from self-employment, benefits in kind, pension income (including uncrystallised funds pension lump sums), income from property, savings, dividends and taxable lump sum death benefits (post 5 April 2016)".
Property income etc, anyone?
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