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Update on tax changes affecting pensions at the start of new tax year 2018-9

There are no great changes to the pension world regarding tax, however there are some small ones;

How you take income will be affected by the changes to Income Tax.

You will now have a tax free allowance of £11,850, up from £11,500.

Basic rate tax applies from £11,851-£46,350.

If you have made a full amount of contribution years to your state pension it will now be worth £164.35, an increase of 3% from 2017-8.

You now have a slightly higher lifetime pension allowance of £1.03million, increased from £1million. This could be higher if you have transitional protection.

Now for the areas that have been reduced;

Once you take any income from non tax free cash pension money your limit for making new contributions will drop to £4,000, it was £10,000. The government took a while to confirm this.

Other areas to supplement income;

The tax free dividend allowance has gone down from £5,000 to £2,000.

ISA contributions remain at £20,000, so no change there!

Elliott Wilson ACSI DipPFS AF3
Pension Transfer Specialist

 

While we keep information on the website as up to date and as accurate as possible, the information on this website does not form part of our advice process. Cambridge Pensions Ltd cannot accept any liability for any decisions made by a client or member of the general public based on any information contained on this website. The value of your investments can go down as well as up and you may get back less than has been paid in.

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