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Key stats about the annual allowance taper

The annual allowance taper is one of the most important, complicated, and controversial, pension measures introduced by the last chancellor. Here are some key stats about the policy.

The tapered annual allowance was introduced in the July 2015 Summer Budget and introduced a reduction for savers earning over £150,000. The rate of reduction in the annual allowance is by £1 for every £2 that the adjusted income exceeds £150,000, up to a maximum reduction of £30,000. Source: HM Revenue & Customs (HMRC)

The tapered annual allowance was introduced in the July 2015 Summer Budget and introduced a reduction for savers earning over £150,000. The rate of reduction in the annual allowance is by £1 for every £2 that the adjusted income exceeds £150,000, up to a maximum reduction of £30,000. Source: HM Revenue & Customs (HMRC)

Around 300,000 pension savers were expected to have net incomes of at least £110,000 and therefore would be affected by this measure.

HMRC expects an additional annual burden to employers of £20 million per year.

In the 2016-17 tax year the exchequer expected to take an extra £260 million from the measure.

By 2020-21 this is expected to rise to £1.3 billion extra tax taken.

Existing reporting procedures needed to be updated to deal with additional reports. The changes are estimated to cost £2 million for the necessary IT enhancements to HMRC systems.

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