UK announces changes to the pension tapered annual allowance

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Changes to the Tapered Annual Allowance (TAA) for pensions are included in the UK’s 2020 budget, effective 6 Apr 2020. The TAA is a mechanism for reducing, in stages, the current £40,000 allowance for annual tax-relieved pension savings for high earners, down to a lower limit — currently £10,000.

Under the new budget, “threshold” and “adjusted” income will increase by £90,000 to £200,000 and £240,000 respectively, to decrease the number of individuals currently subject to the TAA. For individuals still affected by the tapered annual allowance, the lower limit will reduce to £4,000, down from £10,000. The maximum Lifetime Allowance will increase to £1,073,100, consistent with the Consumer Price Index.

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Susan Hanlon
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