Don't Walk Into This Pension Tax Trap

The MPAA is the pension allowance most likely to put a spanner in the works of your retirement plan. Here's what it is and how to avoid it 

Faith Glasgow 25 January, 2021 | 9:54AM
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Pensions

For most people, it’s hard to imagine having a spare £40,000 knocking about to put into a pension during a single 12-month period.

Nonetheless, the generous rules for pension contributions allow you to contribute up to £40,000 gross (or 100% of your annual income each tax year if you earn less than £40,000), including contributions from your employer, and receive relief on the whole lot at the highest tax rate you pay (known as your marginal rate).

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About Author

Faith Glasgow  Faith Glasgow is a freelance journalist specialising in pensions and investment trusts