Annual allowance

The annual allowance is the amount of money an individual is allowed to invest each year into a private pension that attracts tax relief.

This has recently been amended by the government from £255,000 a year down to £50,000 a year. There are lifetime limits on the amount you can save. Again, this has recently been amended by the government from £1,800,000 which is the limit for the 2011-12 financial year, to £1,500,000 for 2012-13.

Everyone can save more than this, either annually or over their lifetime, but tax will need to be paid on the excess above the limits.

The annual allowance is designed to allow individuals who did not start a pension until later in life to be able to catch up.

	Osborne may reduce annual pension allowance to fund tax cuts The Chancellor, George Osborne is considering reducing the tax-free pension annual allowance to fund increases in the income tax personal allowance in the budget later this month.
	Marks & Spencer annual profits down 16% High street stalwart Marks & Spencer has reported a 16 per cent drop in annual profits in what the chief executive called “a challenging economic environment”.
	‘Only a quarter of Brits’ will use whole ISA allowance Just one in four UK consumers plans to make the most of their tax free cash ISA allowance and save the maximum amount, latest research suggests.
	Personal allowance set to increase to £9,205 in today's budget George Osborne delivers his third budget today and its centrepiece is expected to be an increase in the personal allowance before income tax is due to £9,205.
	Halifax offers 80% discount on annual charges Halifax Share Dealing has launched an exclusive fund discount aimed at investors looking to maximise their ISA allowance before the end of the tax year.