Pension contributions – tax relief and the annual allowance

A summary of the tax treatment for registered pensions and an overview of tax relief on pension contributions

April 2020

Barry Foster

Vice President, Strategic & Technical Sales

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Risk Disclaimer

This content is based on our understanding of legal and tax regulations and practice at the time of writing (October 2019). It has been produced for information only. We do not provide tax, accounting, regulatory or legal advice. No action must be taken or refrained from being taken based on this content alone

Key takeaways:

  • What the E.E.T. regime refers to
  • The tax benefits of saving through a pension
  • Understanding the protocol for pension scheme contributions

A summary of the tax treatment for registered pensions and an overview of tax relief on pension contributions

The complexity of the UK’s pension rules can risk client engagement as well as dampen their confidence, more broadly, in the pension and savings industry. A lack of confidence in pensions could lead to inadequate saving for retirement and failing to take advantage of the significant tax efficiencies that pensions offer.

These fears are supported by recent reports of, among others, NHS staff opting out of their pension scheme over concerns about the annual allowance and lifetime allowance tax charges.

Of course, not everyone is affected by these complexities. Indeed, some may consider the tapering of the annual allowance to be a nice problem to have.

However, there is a serious risk of contagion if investors lose confidence in the pensions system. So, perhaps it’s time to go back to basics.

For a broader view on these concerns and to learn more about the tax benefits of saving through a pension, download our full article.

Risk Disclaimer

This content is based on our understanding of legal and tax regulations and practice at the time of writing (April 2020). It has been produced for information only. We do not provide tax, accounting, regulatory or legal advice. No action must be taken or refrained from being taken based on this content alone

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