We are fast approaching the end of the tax year and with a Budget and two bank holidays thrown in during March now a good time to think about any unused allowances for both your pensions and ISAs.
There are some other big changes in pensions that will be coming into force either after 16th March (Budget Day) or 6th April 2016. It is therefore important to stop and think whether these changes might affect you and what action you can take to maximise your potential pension contributions.
If your pension fund is going to be affected by the drop in lifetime allowance from £1.25m to £1m and you are applying for fixed protection (2016) then you will have to stop making pension contributions by 5th April 2016.
From 6th April if you have an ‘adjusted income’ between £150,000 and £210,000 your annual allowance for your pension will be gradually reduced from £40,000 to £10,000. This is tapered on a 2 to 1 basis on the difference between your income and the £150,000 starting level. Therefore it would be beneficial to make any planned pension contributions before the end of the tax year.
As announced in the July 2015 Budget, from 6th April the Pension Input Period (PIP) for pension contributions will no longer be flexible. They will instead run in line with the tax year. However if you are affected by the change in your PIP then there are transitional rules being introduced to ensure pre-budget savings of up to £80,000 are protected from an annual allowance charge. Carry forward can also still be used from the 2012/13, 2013/14 and 2014/15 tax years.
Deadlines for making contributions into ISAs and pensions are;
- Thursday 18 March for Bed & ISA application (Old Mutual ISAs)
- Thursday 24 March for Bed & ISA application (Nucleus ISAs)
- Thursday 31 March for BACS payments and cheques to be sent
If you would like to discuss any of the above changes, or wish to know what your remaining ISA/Pension allowance for 2015/16 is then please contact us.