Where this fits
If you are still working and still paying in, think hard before you take taxable income for the first time. It cannot be undone.
Sunny Bharj
Independent Financial Adviser
Tony Springer
Independent Financial Adviser
Taking taxable income from a pension triggers it. Taking your tax free cash on its own does not. Once triggered, the most you can pay into money purchase pensions with tax relief is £10,000 a year.
The most you can pay into money purchase pensions with tax relief becomes £10,000 a year, down from £60,000, and carry forward cannot be used to add to it.
Defined benefit saving is then measured against an alternative annual allowance of £30,000, reduced further if the taper also applies to you. Anyone who intends to keep contributing should think carefully before taking taxable income for the first time.
Taking your tax free cash on its own does not trigger it. Taking taxable income does, and once triggered it applies for life.
No. Once triggered it applies for the rest of your life.
Yes. The £10,000 covers everything paid into money purchase pensions for you, including employer contributions, which matters a great deal for a director whose company was paying in.
A small pot lump sum of up to £10,000 from an occupational scheme or a personal pension does not trigger it, which is one reason small pots are treated differently.
Your provider must tell you within 31 days of the trigger, and you then have to tell any other scheme you are paying into within 91 days.
If you are still working and still paying in, think hard before you take taxable income for the first time. It cannot be undone.
Independent Financial Adviser
Independent Financial Adviser
A first conversation of about twenty minutes, at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.