The amount that people can add to their pension funds on which they can receive tax relief is to be reduced, the Treasury has confirmed.
The annual limit is to come down from £255,000 to £50,000. Also to be reduced is the lifetime allowance on money that can be saved in a pension fund for which tax relief is allowed. This will come down from £1.8 million to £1.5 million. The new annual allowance takes effect as from April 2011; the new lifetime allowance from April 2012.
We may not all be in the happy position of having quite such large sums to add to our retirement pots, but, whatever our age or circumstances, it is ever more important to plan for the day when we stop working. If you have any questions about your pension savings, we may be able to guide you towards a comfortable retirement?