As we explained last time, many of the old tax limits affecting pensions in general, were swept away in April 2006. The change in tax law didn’t force schemes to adopt the changes, but it gave them scope to. And we were pleased to see that the Government Department which writes our Scheme rules - the DCLG - did introduce many positive changes as a result.
Examples include scrapping the old 40 year limit (which capped the amount of membership you could build up) and scrapping the old 15% contributions limit - meaning far greater scope for paying into one of our Scheme top ups - AVCs.
Now the same Government Department is carrying out a consultation on whether they should reintroduce a limit on AVCs - but this time 50% of pay. This is nowhere near as restrictive as the old 15% limit, but a limit nevertheless.
We will be considering our response to the consultation, with the DCLG’s deadline being January 21st 2007. |
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If you want to read the full detail of the DCLG’s consultation document, please click on the link below:
You are also free to make your own comments to the DCLG.
We will publish an update about this in our Pension Power newsletter, as well as on this website.
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