Pension Contributions - tax relief changes from April 2011
In the Lifestyle Plan, the company takes pension contributions from your
pay before deducting tax and National Insurance (if you pay contributions via PaySmart). You only pay tax on what's left. So whether you pay tax at basic, higher or additional rate you get the full relief straightaway.
Use our pension contribution calculator to see how much your own contributions cost you after tax relief, as well as showing the amounts that actually go into your pension account from you and the Company.
If you want to change your contributions please click here to download the contribution change form.
The maximum amount of contributions that can be paid into all pension
schemes in any year for which tax relief can be received is capped by the
Annual Allowance. From 6th April 2011, the annual allowance is going to
be reduced from £255,000 to £50,000 and will be fixed at this amount until at least 2015/16.
This change will not affect the vast majority of members who do not have annual contributions exceeding £50,000.
The Annual Allowance includes all contributions paid (including contributions paid by an employer) to the Lifestyle Plan and any other pension arrangements that are eligible for tax relief. Contributions in excess of the Annual Allowance can be made but will be subject to tax at your full marginal rate of tax.
Where the Annual Allowance is exceeded in any given year, the unused
element of the Annual Allowance from up to three previous years will be
available to offset against the excess. This commences from April 2011 with a notional annual allowance of £50,000 applying for the last three years.
If you have any queries please contact us on 020 3353 2000 or e-mail firstname.lastname@example.org
GMG Pensions Department