United Kingdom

Pension Tax changes - Have you considered the implications for you and your employees?

Pension tax changes – what’s happening?

  • Further restrictions to the annual and lifetime allowances
  • Your higher earners will need to be made aware of the changes so they can take action
  • The changes come into effect on 6 April 2016, however action needs to be taken before this date to protect accrued pension savings and / or mitigate some of the impact

Changes to the annual allowance:
From 6 April 2016 the annual allowance for tax relieved pension contributions will be gradually reduced from £40,000 to £10,000 for those with an income between £150,000 and £210,000.


From an employer perspective all higher earners will need to be communicated to as there is great deal of complexity in how the changes are applied.

There may be the opportunity to mitigate some of the impact by planning ahead of 6 April 2016.

Changes to the lifetime allowance:
From 6 April 2016 the lifetime allowance for tax relieved pension savings will reduce from £1.25m to £1m.

From an employer perspective all employees will need to be communicated to but particularly those who may have built up defined benefit pension savings at some point during their working lives.

There may be the opportunity to take action to protect the value of accrued pension savings by reviewing the position prior to 6 April 2016.

These changes are set in a broader context of what is effectively an on-going reform of the pension’s agenda influencing how your employees save for retirement and how they take their pension benefits at retirement.

How can we help?

Communicate We will work with you to assess the impact on your workforce then engage your employees with a range of innovative communications to make them aware of the changes.
Educate We are able to deliver more structured education and guidance in a variety of formats including group seminars, online modelling tools and one to one support.
Enable We support those of your employees who wish to take action with a range of face to face and online solutions.

 

 

Aon Consulting Limited is authorised and regulated by the Financial Conduct Authority.

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