Private pension contributions annual allowance (April 2024)

“Thank you for contacting me about the private pension contributions annual allowance.

 

My understanding is that, when it comes to private pension contributions, the reduced (or tapered) annual allowance for a tax year is dependent on net income, pension savings, threshold income, and adjusted income in that tax year. An adjusted income of over £260,000 would result in a reduced annual allowance in the same tax year. 

 

However, it should not be reduced if your threshold income is £200,000 (increased from the previous £110,000) or less for that year. I understand that for a given year, each £2 in adjusted income over the £260,000 limit reduces the annual allowance by £1. The minimum reduced annual allowance was lowered from £10,000 to £4,000.

 

I have been reassured by my colleagues in the Treasury that they are aware of the calls to alter the allowance system. Any decision to modify our tax regime is a matter for the Treasury and careful consideration will be given to any proposed amendments to taxation. I understand that the Government keeps all taxes under review.

 

 I shall be following the developments on this issue closely, and I will ensure my colleagues at the Treasury are aware of the strength of feeling on this issue.

 

Thank you again for taking the time to contact me.

 

Yours sincerely,

 

Sally-Ann Hart MP”