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Personal Pension annual contribution limit

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.

 

 

Date: 1st November, 2012
Author: Cathy Corns

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