From April 2016, individuals with annual income of more than £150,000 (including employers and their own pension contributions) could see their annual pension allowance reduced considerably.
At present the annual allowance is £40,000. However, under new proposals outlined by the Chancellor this will be reduced by £1 for every £2 of income over £150,000 down to a minimum of £10,000. The proposals will not affect individuals with income, excluding pension contributions, of under £110,000.
The previous budget announced a reduction in the lifetime allowance from £1.25m to £1m from 6 April 2016. Fixed protection will be available for individuals with pension pots in excess of £1m at 6 April 2016.
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