Personal Pension annual contribution limit
Date: Thursday 1st November, 2012
Author: Cathy Corns
Profile: Cathy Corns
This is just a reminder that since April 2011 the tax relief on pension contributions has been limited to an annual maximum of £50,000. Where you do not use all of the allowance in one year, you can carry it forward for three years. However, there is one other limit to take into account; broadly personal contributions are capped at the amount of earned income from employment or self-employment less any Gift Aid payments - if this is lower than £50,000.
For employees or directors the solution may be to have your company make the contributions instead - the £50,000 annual limit still applies. but not the earnings cap.
Please note that the opinions expressed in this blog represent the views of the author and not the views of Mercer & Hole.