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29th August 2013

Pension Allowances Reducing

There is a maximum amount (allowance) which a person can accumulate in pension savings without having to pay an additional tax charge once they take their pension benefit. This is gradually being reduced and from 6 April 2014 will reduce again to £1.25m.

There is a maximum amount (allowance) which a person can accumulate in pension savings without having to pay an additional tax charge once they take their pension benefit. This is gradually being reduced and from 6 April 2014 will reduce again to £1.25m. Any pension savings over that limit may be taxed at up to 55%, but there is a partial relief available if you act before the next tax year. Those who apply in time can have their allowance maintained at the current level which is £1.5m. It is surprisingly easy for people who are still fortunate enough to be on final salary schemes to exceed the £1.25m limit. It is estimated that anyone expecting to receive a pension of £40,000 is likely to be close to the limit. If in doubt, as always, consult your Independent Financial Adviser. For more information, please contact Carolyn Bagley on 01604 233233 or click here to email Carolyn.

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