Pension Alignment Gives Opportunity To Pay Up To £80,000 Pension Contribution In 2015-16

16 November 2015

In the past pension schemes could have different PIP (pension input period) end dates which would not necessarily have been the end of the tax year. Whilst tax relief is given on contributions made in the tax year, determining whether the annual allowance, currently £40,000, has been exceeded is measured by reference to the PIP ending in the tax year. This could cause confusion where someone has different pension plans with differing PIP end dates.

From 6 April 2016 all schemes will have a PIP end date of 5 April. Transitional rules are in place for 2015/16 where all open PIP schemes were deemed to end on 8 July 2015 with the new PIP running until 5 April 2016. A scheme could therefore have 2 PIPs ending in the same tax year or possibly even three.

To ensure fairness the total annual allowance for 2015-16 will be £80,000. This is achieved by splitting the periods into 2 mini tax years.

This gives tax payers an opportunity to increase their pension contributions for the current year. Care should be taken and advice should be sought from your Financial Adviser.

For further information please contact Green & Co

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Mister GC at

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