Tapered annual allowance
On 6 April 2016 the government introduced the tapered annual allowance for individuals with adjusted income of over £150,000. However, on 6th April 2020, adjusted income was raised by £90,000 to £240,000.
The contribution amount to a pension each year and the tax relief received is limited to the annual allowance. For most people this is usually £40,000 but for some high earners this may be reduced. The allowance will be ‘tapered’ according to income, although everyone will retain an allowance of at least £4,000. This means the amount which could be tax-efficiently invested into pensions each year, could change from tax year to tax year.
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