Pensions and Annuity, Budget 2010
Restriction of pensions tax relief
With effect April 2011 high income individuals with income of £150,000 or over but below £180,000, tax relief on pension contributions (including the value of employer contributions for those in employment) will reduce to basic rate as income increases.
The rate of reduction is £1 for every £2 above the income limit.
Where income is £180,000 or over, tax relief on pension contributions will be restricted to basic rate only.
Lifetime and Annual Allowances
The 2010/2011 Lifetime Allowance of £1.8 million and Annual Allowance of £255,000 will continue to apply at these levels for a further five tax years, i.e. up to and including the tax year 2015/2016.
Annuity Reform - Pensions - Trivial commutation rules
The Government wants to further simplify the rules governing the commutation of small pension pots, although added costs for the Exchequer and HMRC must be avoided.
Early proposals suggest allowing people to commute pension funds of upto £2,000 and to allow couples to pool small pension pots, allowing them to achieve better value when buying a joint life annuity.