He adds: “If there was someone who earns 210,000 a year, they’d have been reduced to £10,000 under the old rules. So many of them would have capped contributions at £10,000 a year, now under the new rule they will have much more annual allowance, so they will be able to go back and start rebuilding that pension savings by increasing their contributions.”
“Just because you get an annual allowance charge, doesn’t make having a pension a bad idea, because the actual benefit you get after the charge has been taken, can actually be quite valuable.”
Regarding doctors he says: “The NHS scheme pays your charge for you so you don’t actually have to write a check to pay the tax charge.
“They pay the charge from the scheme’s funds, then they reduce your benefits. That benefit after the reduction could still for some people be a good deal for the amount of money you have to pay to generate that benefit. The tax is only bad if your net benefit is not going to be worth it.”
ima.jacksonobot@ft.com
