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2005/06 Rates and Allowances
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Pension Premiums
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2005/06 |
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% Limit of net relevant earnings |
| Age at 6 April 2005 |
Personal Pensions |
Retirement Annuities |
| 35 or under |
17.5 |
17.5 |
| 36-45 |
20 |
17.5 |
| 46-50 |
25 |
17.5 |
| 51-55 |
30 |
20 |
| 56-60 |
35 |
22.5 |
| 61-74 |
40 |
27.5 |
| Subject to maximum earnings |
£105,600 |
No limit |
| Stakeholder - qualifying individuals can contribute up to £3,600 gross (£2,808 net) in 2005/06. |
Notes
- The contribution limits for personal pensions are calculated as a percentage of net relevant earnings with an earnings cap of £105,600.
- The contribution limits for retirement annuities are calculated as a percentage of net relevant earnings with no earnings cap.
- Where both types of policy are held, special rules apply.
- Premiums on personal pension and stakeholder pension policies are payable net of basic rate tax relief at source. Higher rate relief, where available, is obtained via a claim on the self assessment tax return.
- Personal pension premium earnings caps for earlier years are:
| 1989/90 |
£60,000 |
| 1990/91 |
£64,800 |
| 1991/92 |
£71,400 |
| 1992/93 |
£75,000 |
| 1993/94 |
£75,000 |
| 1994/95 |
£76,800 |
| 1995/96 |
£78,600 |
| 1996/97 |
£82,200 |
| 1997/98 |
£84,000 |
| 1998/99 |
£87,600 |
| 1999/00 |
£90,600 |
| 2000/01 |
£91,800 |
| 2001/02 |
£95,400 |
| 2002/03 |
£97,200 |
| 2003/04 |
£99,000 |
| 2004/05 |
£102,000 |
- Additional Voluntary Contributions for members of occupational pension schemes (Free standing AVCs and AVCs) allow members of occupational schemes to provide for greater financial security in retirement.
- Total contributions to the occupational scheme and any free-standing scheme may be up to 15% of current-year remuneration, subject to the same cap on earnings as at (5) above.
Did you know?
- £110,000 is approximately the amount a non-smoking female needs to have saved at age 65 to buy a retirement income of £100 a week.
- £500,000 is approximately the amount a non-smoking male needs to have saved to retire at 55 to provide an inflation proof annual income of £20,000.
- 13 million are not saving enough to provide for a secure retirement - that is almost half of the 28 million working population.
- The Association of Bristish Insurers reports that only 38% of people are confident they will have enough money to live comfortably in retirement.
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