As a result of the pension changes announced by the Chancellor last year, which come into effect on the 6 April 2016, there are some significant reductions in the level of pension contributions that can be made.
There is also much speculation in the press that the Chancellor will cut tax relief on pension contributions in the March Budget – with immediate effect. It is a widely held belief that he will abolish tax relief at 40% and 45% and replace it with a single flat rate of tax relief of between 20% and 30%. However, there is no guarantee that he will take these actions.
The coming weeks could therefore be the last chance for higher rate and additional rate taxpayers to get tax relief at their marginal rate.
PKB Partner, Steve Greehy says “If you are considering maximising your pension contributions and are in a position to do so now, I would strongly urge you to seek advice in the next few weeks as the amount you can contribute now may be significantly greater than after the 5 April or even after the Budget on 16 March.”
There are a number of complexities to be taken into consideration and each individual’s circumstances will be different and should be properly assessed by a professional adviser. A pension contribution should not be made without advice and certainly not at the current time.