This is the case if they are subject to the tapered annual allowance – a limit on the amount of contributions paid to, or benefits accrued in, a pension before the person has to pay tax.
Since April 6, 2020, it only affects those who meet both of the following income requirements:
- A threshold income above £200,000
- An adjusted income above £240,000.
Those with adjusted income over £240,000 can have their standard annual allowance reduced from £40,000 on a graduated scale until at salaries £312,000 or more the limit can fall to just £4,000.
Mr Smith suggested the changes to income tax may alter how people make their contributions in the future.