Over the years the annual allowance for pensions has changed many times. It’s difficult to keep up with the changes. Today it is possible to contribute up to £40,000 per annum into a pension. However, it may be possible to make even larger contributions using previous years’ unused allowances.
The introduction of the tapered annual allowance means that many high earners are only able to contribute £10,000 into a pension without incurring hefty taxes, normally making larger contributions unsuitable.
You can go through a ‘carry forward’ exercise to use some unused allowances, but once you have done this what can you do?
Here are some options:
Venture capital Trusts
Provide 30% tax relief
£200,000 annual limit
ISAs
£20,000 allowance per annum
You can also use your spouse’s allowance
Investment bonds
No annual limit
For more information please contact us and have a free chat with an Adviser.