The budget of 8 July 2015 introduced a number of changes. The most important of these was a re-alignment of the reporting years for all pension schemes to the tax year. As from 6 April 2016 all pensions schemes have to report annual allowance in line with the tax year 6 April to 5 April.
To allow schemes to do this without adversely affecting their members, HM Treasury has altered the rules regarding AA for this year only (2015/16). These changes are:
- the introduction of a pre and post alignment period.
- available annual allowance for the pre alignment period of £80,000.00.
- AA for the post alignment period of £0.00, but allowable carry over from the pre alignment period of up to £40,000.00.
- proportioning of the calculated annual allowance between the pre and post alignment period as dictated by HM Treasury.
- Money Purchase AA pre-alignment of up to £20,000.00 with up to £10,000.00 available to carry over to the post alignment period.
- alternative AA of £60,000.00 pre-alignment and up to £30,000.00 post alignment
- CPI for pension input start is increased for this year only to 2.5%, not 1.2%.