New figures show an increase in the number of people paying tax charges for exceeding limits on pension tax relief. It’s perhaps unsurprising to see these numbers rise, as limits on pension tax relief have been falling considerably in recent years. When first introduced, the lifetime allowance for pensions stood at a generous £1.8m. It has since fallen to £1.03m, although some pension savers have transitional protection in place to freeze their individual lifetime allowance at a larger amount.
Paying tax when exceeding pension tax relief limits
This 616 word blog post looks at the latest official figures showing a growing number of people paying tax charges for exceeding limits on pension tax relief. Includes a basic explanation of the lifetime allowance, annual allowance (including tapered allowance for higher earners and money purchase annual allowance). Also includes an expert comment from Steve Webb, Director of Policy at Royal London. Written on 28th September 2018.