Chancellor ups annual pension allowance thresholds by £90,000

March 2020

The point at which tapering of the annual pension allowance kicks in will increase by £90,000 for both threshold income and adjusted income in 2020/21.

The move, which was announced in last month’s Spring Budget, means the taper will not affect anyone with income of less than £200,000.

It brings to an end a long-running rift between the Government and senior clinicians, many of whom either retired early, left the NHS pension scheme or rejected overtime shifts to avoid tax bills.

Chancellor Rishi Sunak said this “will take around 98% of consultants and 96% of GPs out of the taper altogether”, although critics argue the controversial taper should have been abolished.

Sunak also announced a reduction to the minimum annual allowance to £4,000 for those with incomes which breach both the threshold income and adjusted income limits.

Steve Cameron, pensions director at Aegon, said:

“The tapered annual allowance has seen some senior NHS professionals facing tax bills running to six figures.

“Removing the taper would have been too costly but instead, the threshold when it kicks was raised.

“This may reduce the number of higher-paid individuals who face a tax penalty, but many individuals will still fear being caught out.

“The Government’s priority right now must focus on health matters.

“Longer term, the overall system of pension reliefs and allowances needs a thorough overhaul to make sure it is fit for purpose and not just for the NHS.”

The £40,000 annual pension allowance - which remains in place for 2020/21 - is tapered for those on high incomes.

That meant for every £2 of adjusted income above £150,000 a year in 2019/20, where the threshold income of £110,000 was also breached, £1 of the annual pension allowance was lost.

From 6 April 2020, the adjusted income figure increases to £240,000 and the threshold income increases to £200,000.

Anyone with income of more than £300,000 in 2020/21 will have their minimum reduced tapered allowance decreased to £4,000.

Talk to usabout personal tax planning.

Business news
Finsbury Robinson

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare.

Contact Us

Sign up to our
Monthly Business Newsletter

Sign up to receive our monthly Business Newsletter that will keep you up to date with everything going on in accounting, tax, and finance. 

Finsbury Robinson Services
R&D Tax
Has your company undertaken
any R&D related activities?
Find OUt More
Affected by the
Let Property Campaign?
Find OUt More
Check out our fixed price
Accounting and Business Packages
Find OUt More
Free Book-keeping
Software for all Clients
Find OUt More
Free Auto Enrolment Pensions Advice
Calculate your Contribution!
Find OUt More
Are you aware of the Capital Gains Tax Changes coming?
GDPR Compliance
Find OUt More

Sign up to our Monthly Business Newsletter

Find News Articles by Category

News HomePension
Chancellor ups annual pension allowance thresholds by £90,000
To get in touch use our Quick Contact Bar:

Monday                 8:30AM – 5:30PM
Tuesday                8:30AM – 5:30PM
Wednesday          8:30AM – 5:30PM
Thursday              8:30AM – 5:30PM
Friday                 9:00AM – 12:30PM
Saturday                                 Closed
Sunday                                   Closed

Finsbury Robinson
237 Westcombe Hill