At the moment, tax relief remains available on pension contributions at an individual’s top rate of tax, making pensions a very tax efficient form of investment. Especially when the new provisions for flexible access of pension funds is taken into account.
But we have yet another Budget approaching, on 22nd November, and it has to be said that this relief is always under threat. So if you are considering making any additional pension provision this year, I would recommend that you do so before Budget Day, if possible.
The annual allowance is presently £40k for most taxpayers, but can be as low as £10k for those with income in excess of £110,000. It’s reduced even further for individuals who have already drawn from a money purchase pension fund.
However, other than when the Money Purchase Annual Allowance bites, unused relief can be carried forward for three years.
You would be well advised to consider using as much of your available relief as is possible, before those in control of the public purse decide they can no longer afford to be quite so generous.