For every £2 of income above £150,000 per annum, £1 of annual allowance will be lost. The maximum reduction will be £30,000 meaning that anyone earning over £210,000 will have their annual allowance capped at £10,000.
An income floor will mean the taper will not apply unless the individual's income excluding pension contributions exceeds £110,000 (referred to as their “threshold income”).
Pension legislation is complex which is why there are rules in place about seeking Independent Financial Advice on even relatively small pots. If you have any questions or concerns about breaching the Annual Allowance or Lifetime Allowance, make sure you speak to someone well qualified. The highest pension qualifications with the Chartered Institute of Insurance, our most popular qualifying body, are AF3 (since replaced by two exams AF7 and AF8 in 2017). Several members of our team hold these exams