Annual allowance

The annual allowance is the amount of money an individual is allowed to invest each year into a private pension that attracts tax relief.

This has recently been amended by the government from £255,000 a year down to £50,000 a year. There are lifetime limits on the amount you can save. Again, this has recently been amended by the government from £1,800,000 which is the limit for the 2011-12 financial year, to £1,500,000 for 2012-13.

Everyone can save more than this, either annually or over their lifetime, but tax will need to be paid on the excess above the limits.

The annual allowance is designed to allow individuals who did not start a pension until later in life to be able to catch up.

	Osborne may reduce annual pension allowance to fund tax cuts The Chancellor, George Osborne is considering reducing the tax-free pension annual allowance to fund increases in the income tax personal allowance in the budget later this month.
	ONS reports annual house price growth accelerates house prices rose by an average of 3.1 per cent across the UK in the 12 months leading to June 2013, according to the ONS.
	Record annual drop in the cost of car insurance The latest AA Insurance Index shows that car insurance has fallen by almost 10 per cent over the last 12 months and hone insurance costs are dropping too.
	BBA reports mortgage approvals rise by annual rate of 30% Figures for high street banks were positive but lending to businesses remain stagnant, according to new data by the British Banker’s Association.
	Budget 2013: Workers to benefit from £10,000 personal allowance George Osborne presents his budget on Wednesday March 20th under pressure to deliver measures to promote growth but still cut the deficit. What will the Chancellor say?