30/12/2008 - Changes to tax rates

The basic rate of income tax changed from 6 April 2008

From 6 April 2008, the basic rate of income tax changed from 22% to 20%, which effectively reduces the level of tax relief you receive on your pension contributions by 2% if you are a basic rate taxpayer.

The level of tax-privileged pension contributions you can make increases each year in April. There are two applicable thresholds - the Annual Allowance and the Lifetime Allowance; any pension contributions made above these allowances are subject to heavy tax penalties.

The Lifetime Allowance is £1.65 million for the tax year 2008/09 - this is the total amount of tax-privileged retirement savings you can build up throughout your working lifetime.