Use or lose your £40,000 pension bonus

20 Nov 2018

Higher earners have six months left to take advantage of a quirk in the pension rules that allows them to double up on their tax relief. Savers can put £40,000 a year tax free into a pension, as their “annual allowance”. 

They are also allowed to carry forward any unused allowance from the previous three years. However, a rule change in the 2015-16 tax year allowed people to put in double the annual allowance for that year, increasing their contribution from £40,000 to £80,000.

Under the carry forward rules, anyone who did not take advantage of the double tax break then must do so before April 2019 or lose it.