The Pensions Office is responsible for administering and providing information on the pension schemes that are operating at the University.
Pension Scheme tax allowances
Changes to lifetime and annual allowances
Changes to the lifetime and annual allowances have been confirmed by HM Revenue & Customs.
This allowance limits the tax preferential pension benefits you can build up in total in the UK.
The lifetime allowance is reducing from £1.25m to £1m from 6 April 2016.
Members are restricted in the amount of tax preferential pension benefits that can be build up in a year by the annual allowance (AA). The current annual allowance is £40,000 a year but could be less for some members on higher earnings.
Should your benefits built up over the year exceed this allowance, then you will be re-assessed for income tax (the excess will be added to your taxable pay for the year) unless you have unused allowance from the three prior years.
There are two changes to this allowance as follows:-
- Transitional arrangements are in place for the 2015/16 year to align scheme practice with tax years.
- From April 2016, members with taxable income in excess of £110,000 will need to consider the new tapering rules, which could mean your annual allowance is less, possibly as low as £10,000 a year.
Independent Financial Advice
Some aspects of pensions are complex and members are presented with difficult decisions to make.
The Pensions Office can provide information about the schemes and options available to members, but cannot provide financial advice.
Members who need financial advice are recommended to contact an independent financial adviser.