We may see some dramatic changes to Pension Tax Relief on contributions when the Chancellor delivers his budget on 16 March 2016.

The Government has been looking at all aspects of Pensions and they have been discussing the merits of a Flat Rate of Income Tax Relief, potentially offering £1 for every £3 saved (the equivalent of 25% Relief) for everybody.

Whilst this is good news for Basic Rate Tax Payers, it will affect those who pay Higher Rate Tax Payers, dramatically reducing the 40% Tax Relief currently received on personal pension contributions.

In the Budget last July, the Chancellor severely restricted the amount that Additional Rate Tax payers can pay into a Pension by reducing the Annual Allowance for those earning over £150,000. At the same time, the Government also stated that it is ‘consulting on whether there is a case for reforming pensions tax relief to strengthen incentives to save and offer savers greater simplicity and transparency’.

Consider your Pension Tax Relief

With this in mind, it might be wise to consider your situation concerning your Pension contributions before the Chancellor delivers his Budget

Please do not hesitate to contact me if you wish to discuss the above by sending an email to kevin@kwaccounting.com .I very much look forward to hearing from you.