Month: November 2014

The Annual Allowance, set by HM Revenue and Customs (HMRC), is the maximum amount of pension savings you can receive tax relief on each year. HMRC reduced the Annual Allowance from £255,000 to £50,000 from 6 April 2011, with the result that the total tax-free growth in the value of your NHS benefits and other pension arrangements you may have is capped at £50,000. If the growth in your pension savings is more than the Annual Allowance then a tax charge may be payable on the amount over £50,000. This is the Annual Allowance charge. The Annual Allowance charge is worked out by calculating the difference between the value of your NHS benefits at the start of the pension input period (the opening value) compared with the value of your NHS benefits at the end of the pension input period (the closing value). To find the opening value we calculate your NHS benefits to the day before t...