Changes to person pension tax relief

One of the more significant announcements that was easily missed in the autumn statement was the reduction in the maximum amount that an individual can pay into their pension each year from £50,000 to £40,000 whilst still receiving full tax relief. Many financial experts think that this is another small step towards the removal of higher rate tax relief on all pension contributions. If you are higher rate tax payer and pay £6,000 into your pension the government currently contributes a further £4,000, but if the higher rate relief was removed this would drop by 50% to £2,000. So the message is if you are a higher rate tax payer think about putting money in to your pension now because this generous tax relief may not be around forever.