Additionally, if all your pension pots added together are worth more than the lifetime allowance - which is currently £1 million, you could be liable to a tax charge of up to 55%.
If you have pensions above or close to the limit, we can help you to make the most of the remaining tax incentives available. And if your pension is smaller we can advise you how to avoid exceeding the lifetime allowance.
Pensions do still provide a tax-efficient way of providing for your future income needs. For example, subject to limits and thresholds, higher-rate (40%) taxpayers receive an immediate 20% pensions tax relief and can claim up to a further 20% through their tax return. This means that for higher-rate tax payers, a £10,000 pension contribution could effectively cost as little as £6,000.
Please note that this page was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change. Tax treatment depends on your individual circumstances; therefore you should not rely on this information without seeking financial advice.
No investment is suitable in all cases and if you have any doubts as to an investment's suitability then you should contact us.