It appears that the continued aim of the new Government is to move quickly to cut the deficit further. Plans have been outlined to reduce the deficit by £3 Billion pounds ahead of schedule. The stated aim being £13 Billion over the next 2 years.
Pledges have been made not to increase VAT, rates of National Insurance or the 20p and 40p rates of income tax – meaning the squeeze will have to come in other areas.
One area expected to come under scrutiny includes restricting higher rate tax relief on pension contributions.
In recent times, severe constraints have been placed on how much you can pay into a pension each year (reduced from £255,000 to £40,000) and how much your pension can be worth over your lifetime (no limit down to £1 Million).
We are not ones for scaremongering, or a “buy now whilst stocks last” adviser, but if you were planning on making pension contributions this tax year, and you are a higher rate taxpayer or earn over £150,000, it would be prudent to make that contribution sooner rather than later. Perhaps before the Chancellor’s first budget based solely on the Conservative electoral mandate.
If you wish to review your pension planning or discuss what options are available, please contact Tim Norris or Alan Clifton by calling 0800 731 7614 or by emailing firstname.lastname@example.org