Pension Tapering Allowance

As part of this years budget, the chancellor unveiled plans to increase the tapered annual allowance threshold by £90,000. The tapered allowance, initially introduced from 6th April 2016 saw the annual allowance reduce from £40,000 to £10,000 for those with income levels of £110,000 (reaching threshold level), and £150,000 to £210,000 (reaching adjusted annual income level).

From April 2020, both the threshold and adjusted incomes will rise by £90,000 to £200,000 and £240,000, respectively. For individuals with total incomes of more than £300,000, the annual allowance will gradually fall from £10,000 to only £4,000, and so in short, the contribution will be limited to £4,000 for those earning in excess of £312,000.