Change to the Annual and Lifetime Allowance

The Treasury has announced this morning that the annual allowance will be cut from £255,000 to just £50,000 from April 2011.

They have also said that the Lifetime Allowance would be reduced from £1.8 million to £1.5 million from April 2012.

The reduction of the annual allowance will replace the complex rules introduced in the Finance Act 2010 relating to high earners but could have a significant effect on an individual's retirement planning.

We do not yet know how this change will affect those people who have funds in excess of £1.5 million but we will keep you informed of developments.

This current tax year looks like it might be the last opportunity to be able to pay significant pension contributions and receive tax relief.  If you wish to discuss this further please contact your usual MGP adviser.

For more details please see our Newsletter.