Recently we have seen the Chancellor announce both the summer budget and the finance bill, and many people are wondering how the new changes will affect their day-to-day lives. Understandably, a lot of questions have emerged relating to the new rules; we’re here to give you answers that will help explain what the changes mean for you.
Pension Input Periods
In the future, the pension input period (PIP) is going to be measured across the tax year – from April to April – and although this will make for a simpler process in the long run, in order to implement the changes, the 2015/2016 tax year has been split into two chunks: pre-budget and post-budget. There the pre-budget annual allowance will be £80,000, while the post-budget annual allowance (AA) will be any remaining amount of that £80,000 up to a maximum of £40,000.
What does this mean if my PIP was aligned to the tax year?
How will this affect carry forward from the 2015/2016 tax period?
Annual Allowance Cuts
For those earning over £150,000, the annual allowance will now be cut by £1 for every £2 earned past the threshold.
What types of income will be taken into account?
How will this affect carry forward?
Lifetime Allowance Cuts
As of April 2016, the lifetime allowance will be reduced from £1.25 million to £1 million.
What protection will be made available?
If you have any other unanswered questions or need more details on any of the information above, please don’t hesitate to get in touch at 01524 416872; we’ll be more than happy to deal with all your queries. You can also follow us on Facebook and Twitter for more great industry updates!
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