Savings
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The headline change for high earners surrounds pensions tax break changes set to take effect from April. Currently, the annual allowance for pension contributions is £40,000. This amount is subject to tapering once an individual’s adjusted Income exceeds £150,000. For every £2 of income over £150,000 an individual’s allowance is reduced by £1, meaning once income is over £210,000, contribution allowances are £10,000. Under the outlined changes, the £40,000 annual allowance will be available for individuals with an Adjusted Income that is less than £240,000. Individuals with income above £240,000 will be subject to a tapering of their allowance. The minimum level to which the annual allowance can taper down will be lowered from £10,000 to £4,000. Anyone whose earnings were between £210,000 and £300,000 will be better off, while those earning more than £300,000 will be subject to the further tapering from £10,000 to £4,000.
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The pension lifetime allowance is set to increase in line with CPI in April 2020 to £1,073,100.
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The annual allowance for Junior ISA’s will increase from £4,368 to £9,000 in April.
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