Published 4 days ago • loading... • Updated 2 days ago

The £60,000 Pension Rule Catching Workers Out – and Many Don't Realise for Years

HMRC data shows 30,440 people exceeded their pension annual allowance in the 2024/25 tax year, marking a significant surge in individuals falling foul of the limit.
The tapered annual allowance remains a trap for high earners, as those with threshold income above £200,000 and adjusted income above £260,000 see their limit shrink to as little as £10,000.
Statistics show a 22 per cent rise in individuals reporting breaches from the previous year, while the total value of contributions exceeding the limit soared 33 per cent to £672 million.
Because the system relies on Self Assessment, some savers only discover they over-contributed two or three years later, often failing to realize employer pension contributions count towards the calculation.
If a charge is unavoidable, experts at Evelyn Partners advise checking if Scheme Pays is available rather than automatically stopping pension contributions to avoid the tax bill.

Insights by Ground AI

16 Articles

HMRC's stealth pension tax 'dragging' thousands of retirees into paying more

Analysts are sounding the alarm over the stealth tax raid pushing tens of thousands of retirees into paying more tax on their hard-earned pension savings.New HM Revenue and Customs (HMRC) data has found that 30,440 pension savers exceeded their annual allowance during the 2024/25 tax year, marking a 22 per cent increase compared with the 24,950 who did so the previous year.The value of contributions made beyond the permitted limit jumped even mo…

3 days ago·London, United Kingdom

Read Full Article