Pensions and Tax – high earners
Overview
You may know that the Government simplified the tax rules for pensions
from 6 April 2006 (also referred to as A-day). This
section of our website is meant to help you understand the changes and how
they might affect you.
The Government harmonised and simplified the different tax rules that apply
to occupational pensions (such as the Civil Service pension arrangements)
and private pensions (such as personal and stakeholder pensions). For most
people, tax simplification will either have no effect or may reduce
existing restrictions on saving for retirement. However, in some cases
where individuals have high pension benefits, the new rules mean that extra
tax will be payable on retirement.
This section of our website is intended to help those who want to know more
about the tax changes. We will be adding more detail in the weeks and
months ahead so you may want to bookmark this page and visit it again in
the future.
Note
The information in this section of the website is based on Civil Service
Pensions Division’s current understanding of the pensions and tax regime.
It is provided for members of the main Civil Service pension schemes and
for those in schemes which mirror these rules. It does not constitute legal
or financial advice and does not over-ride any provision in scheme rules,
Finance Act 2004 or any other legislation. You should consider taking
independent financial advice before making decisions affecting your
personal finances.
