- You may be able to carry forward unused pension allowances from the previous three tax years
- Isas are a very tax-efficient way to save for, and take income in, retirement
- High earners could consider venture capital trusts (VCTs)
The pensions annual allowance rose from £40,000 to £60,000 at the start of the current tax year, but this increased threshold may be exceeded by some high earners and the tapered annual allowance (see box) may have an impact, too. Fortunately, there are a series of options open to even these savers.
For instance, your employer might be able to make a tax-efficient contribution to your pension even if that takes the total value of contributions above the value of your earnings in the relevant tax year. HM Revenue & Customs has to deem this as being wholly and exclusively for the purpose of business, so generally the contribution should be of a reasonable level in relation to your work for the company and proportionate to the value you add to it. This can be particularly useful if you own your own business, are self-employed or if your earnings and pension contributions tend to fluctuate.