Up until 6 April 2015, pension contribution limits, known as the annual allowance, were relatively simple.
In essence you could contribute up to £40,000 (gross) per annum either via an employer, individual or a combination of both. In addition, where you had unused annual allowance (AA) from the previous 3 tax years, you could carry forward the unused allowances to the current tax year.
From October 2015, existing pensioners and those retiring before 6 April 2016, will have the option of making additional National Insurance Contributions (Class 3A) in order to increase their state pension by a maximum of £25 a week / £1,300 a year.
The income is taxable, linked to inflation (CPI) and 50% can be inherited by a surviving spouse. The scheme operates like an annuity in the sense that the individual pays a lump sum in exchange for a guaranteed income for life. The amount of the lump sum required will depend on the individual’s age.
Holden & Partners
The Piano Works
117 Farringdon Road
London EC1R 3BX
Tel: 020 7812 1460
Holden & Partners is recognized as one of the leading Independent Financial Adviser (IFA) companies in the UK, having recently been named as a Top 25 IFA by thewealthnet.com for the fifth time in the last six years, as well as being named as a New Model Adviser Top 100 firm for the second year in a row.
These awards, alongside the Chartered Insurance Institute Chartered Financial Planner Firm status demonstrate our recognition for high quality financial planning, expertise, professionalism and commitment to delivery and service to our clients.