There are changes to the tax relief that you can claim on pension contributions. Typically you can save 100% on your contributions made to any registered pension schemes before the age of 75. The amount you can contribute every year is subject to what is called annual allowance. For the tax year 2010/11 the annual allowance is capped at £255,000. For the tax year 2011-12 beginning 06 April 2011 this will be reduced to £ 50,000. If you have made pension contributions in the last three years any unused annual allowance of those years could be carried forward.
You can withdraw 25% of your pension on maturity as a lump sum without paying any tax if your total savings are within the ‘lifetime’ allowance. For the tax year 2010-11 the lifetime allowance is £1.8 million and the government has proposed to reduce this to £1.5 million from April 2012.
