Raising the ceiling on contributions
April 2010
Many of the old restrictions which stipulated how much you could save into your pension every year and, just as importantly, how much you could take out, have been swept aside.
The ceiling on pension contributions has been raised significantly. You can save a total of £1.8 million (2010/11) over your lifetime and annually contribute up to £255,000 (2010/11), however special rules apply for those earning over £150,000 a year so its important to take specialist financial advice. For most of us, this is the stuff of fantasy, but it certainly gives you something to aim at.
What it does mean to you and me, however, is that we can now put pretty much what we like of our salaries into our pension pots every year.
That’s right. Providing you don’t hit the annual ceiling you could, if you wanted, put up to 100% of your salary into your pension. Note: you are unlikely to bang your head on this particular ceiling unless you are an extremely dedicated saver.
What it really means for most of us is this: away with those arbitrary pension rules and enter a lot more financial flexibility. In other words, if you have the spare cash to invest, you could be a giant step closer to the retirement of your dreams.
It’s particularly helpful for those people in their late 40s and 50s who, having devoted their lives (and their money) to raising a family, feel they have neglected their own future.
For related information read The pension reforms
