Changes to the Annual Allowance come into force from 6 April 2016, so please make sure your employees are ready.
For those with a total income of over £150,000 (including the value of the employee’s and employer’s pension contributions) the Annual Allowance will reduce by £1 for every £2 of income over this threshold. This will result in a tapered annual allowance, which will range from £40,000 for those at the threshold, down to a minimum of £10,000 for those with a total income of £210,000 or more.
This change could affect more of your people than you may think; employees with a total income of £110,000 or more (excluding total pension contributions) will be required to assess whether the value of any pension contributions takes them over the £150,000 threshold.
If individuals think they may be affected, they should seek independent financial advice.
The Lifetime Allowance is also changing from 6 April 2016, from £1.25 million to £1 million. You can find out more on GOV.UK.