Pensions Tax Allowances for Individuals
- Tax relief in the context of pensions (both during the saving phase and at the point of access) requires care and attention.
- Under the current UK tax regime, pension savings which exceed the "Annual Allowance” or "Lifetime Allowance" are subject to taxation. Employers may want to consider altering benefit structures for high earners.
- Taxation at the point of accessing pension savings depends upon the manner in which those savings are accessed. There are "unauthorised payments" and "authorised payments", with the tax levied depending on the precise type of payment.
- From 6 April 2015 changes were made to make access to DC pension savings more flexible (with taxation rules also changing).