How did the budget affect how much you can pay into pensions?
The spring 2023 budget announced some substantial changes to the limits that apply to pension contributions.
Each year individuals can generally invest into pensions the lower of:
-
- Their earned income.
- The annual allowance.
- The tapered annual allowance.
There is also something called carry forward which can allow individuals to invest a little more in certain tax years, but the rules on this are very complicated.
The budget did not change the above rules, but it did change some of the limits that apply.
It was announced that the annual allowance will increase from £40,000 to £60,000 from 6th April 2023.
The minimum tapered annual allowance will increase from £4,000 to £10,000 from 6th April 2023. The minimum income threshold to start triggering the tapered annual allowance will also increase to £260,000.
The combination of these changes should allow more flexibility to anyone wanting to maximise their pension contributions.
Farrell Financial Planning are independent financial advisers (IFAs) based in Glasgow. We offer independent financial advice on pensions, investments, income protection, mortgages and much more.
Contact us today and find out how our expert advice can help you plan for your retirement with confidence.
It is crucial to obtain expert professional advice on pensions as the rules can be extremely complicated.
Information correct as at 15/03/23.
A pension is a long-term investment. The fund value can fluctuate and go down. All information is based on Farrell Financial Planning’s understanding of UK law & HMRC practice in the UK. Tax and legislation are subject to change.