Minimising liabilities

Over the past few years, the amount you can save into a pension has dramatically reduced. There have been changes to both the annual allowance, which is the amount you can contribute to a pension each year with tax relief, and the lifetime allowance, which affects the total amount you can save towards your retirement.

The rules apply to both the NHS Pension Scheme as well as any private pensions you may be contributing to, so it is important to find out how they could impact you.

Annual allowance

The annual allowance is the maximum amount of pension savings that benefits from tax relief each year. It has reduced from a high of £255k in the 2010/11 tax year to £50k in subsequent tax years, and will reduce again to £40k from April 6, 2014. If you exceed this amount, and you have any unused annual allowance from the previous three years, you are allowed to carry this forward to offset part or all of your excess contributions.