For those fortunate enough to have a very high income, investing in a pension after 2011 looks less attractive. And remember it is not just earned income which matters - all income, including dividends from shares and interest on savings is taken into account.
From 2011, high earners are limited to 20% relief on their contributions, and also face a tax charge on any employer contributions. So these people may find alternative investments are more tax efficient. These may include ISAs, pension contributions for a spouse or child, growth investments which give rise to capital gains tax, and qualifying life policies. In this tax year and next, paying in £20,000, or a higher amount justified by existing regular contributions, appears to be a sensible option as this is the final opportunity for high earners to receive higher rate tax relief. But b...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
