Since 6th April 2016 if you have income above £110,000 the amount you can pay into your pension and receive tax relief on each tax year (your annual allowance), may be reduced.
Anyone with 'adjusted income' over £150,000 could be affected. This means your allowance will decrease by £1 for every £2 that exceeds £150,000. Those with 'adjusted income' of more than £210,000 could see their allowance reduced to a minimum of £10,000. Anyone with 'adjusted income' of less than £150,000 a year should not be affected by the tapered annual allowance.
The definition of income used for this purpose isn’t straightforward. It includes not just your earnings, but any returns from investments you may hold outside of tax-efficient accounts and, critically, the value of any pension contributions made by your employer.
The value of investments can go down as well as up, and you may get back less than you invest. The eligibility to invest in a pension depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. You will not normally be able to withdraw money from a pension until you are 55.