- The annual limit (the maximum amount which you can pay into a pension and receive tax relief) is to equal to your earnings or £50,000 which ever is lower.
- Income tax relief on pension contributions will be at pension savers’ highest marginal rate. This includes 40% and 50% income tax payers.
- However, it is possible to offset contributions in excess of £50,000 against unused allowances from previous years under a three-year carry forward provision - subject to a number of rules. This means that it is feasable for someone to make a tax relievable pension contribution of up to £200,000 in a tax year, although individuals would still also be capped at 100% of net relevant earnings for receiving the tax relief.
Speak to a financial adviser before doing anything.
(update 30th Novemeber: there were no announced changes to pension legislation in the Autumn Statement. So you can still take full advantage of this money tip but without the rush)