Lifetime allowance for pensions
The lifetime allowance for pension savings will increase in line with CPI for 2020/21, rising to £1,073,100.
Annual allowance for pensions
The income levels for the tapered annual allowance will increase by £90,000. Specifically, the ‘threshold income’ level will increase from £110,000 to £200,000, and the ‘adjusted income’ level will increase from £150,000 to £240,000.
The minimum level to which the annual allowance can be tapered down to will decrease by £6,000 (i.e. from £10,000 to £4,000). Therefore, anyone with an ‘adjusted income’ level of £312,000 or more will be subject to an annual allowance of £4,000.
Whilst the increases in the thresholds for taper purposes are positive and go some way to tackle the “pensions trap” for NHS and other workers, the increased taper down to £4,000 will significantly curtail the ability of high earners to generate pension savings.
ISAs
The ISA annual subscription limit for 2020/21 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2020/21 will be increased to £9,000.
Key contacts
If you have any questions, contact a member of the Pensions and investments team for assistance:
