The Chancellor of the Exchequer, Rishi Sunak, made his first Budget Speech today in the House of Commons.
The main change for pensions is an alteration to the complex Annual Allowance Tapering Rules, which affects high earners including many senior NHS employees, effectively reducing the tax advantages of pension savings.
With effect from 6th April 2020, the tapering rules will remain in place, but the thresholds will each increase by £90,000 taking out 98% of NHS employess and 96% of the general population from the effects of this. There will however be a further reduction in the Minimum Tapered Annual Allowance at the upper end of earnings.
| 2019/20 (current) | 2020/21 (new) | Difference | |
| Threshold Income | £110,000 | £200,000 | +£90,000 |
| Adjusted Net Income | £150,000 | £240,000 | +£90,000 |
| Minimum Tapered Annual Allowance | £10,000 | £4,000 | -£6,000 |
For anyone with Adjust Net Income between £150,000 and £300,000 the effect on the Annual Allowance is positive, compared to the current rules. If Adjusted Net Income exceeds £300,000 the new rules will result in a lower Tapered Annual Allowance in 2020/21.
Here are some examples based on the new rules, assuming Threshold Income is exceeded in all cases:
| Adjusted Net Income | Annual Allowance 2019/20* | Annual Allowance 2020/21* | Difference |
| Up to £150,000 | £40,000 | £40,000 | Same |
| £160,000 | £35,000 | £40,000 | £5,000 better |
| £170,000 | £30,000 | £40,000 | £10,000 better |
| £180,000 | £25,000 | £40,000 | £15,000 better |
| £190,000 | £20,000 | £40,000 | £20,000 better |
| £200,000 | £15,000 | £40,000 | £25,000 better |
| £210,000 | £10,000 | £40,000 | £30,000 better |
| £220,000 | £10,000 | £40,000 | £30,000 better |
| £230,000 | £10,000 | £40,000 | £30,000 better |
| £240,000 | £10,000 | £40,000 | £30,000 better |
| £250,000 | £10,000 | £35,000 | £25,000 better |
| £260,000 | £10,000 | £30,000 | £20,000 better |
| £270,000 | £10,000 | £25,000 | £15,000 better |
| £280,000 | £10,000 | £20,000 | £10,000 better |
| £290,000 | £10,000 | £15,000 | £5,000 better |
| £300,000 | £10,000 | £10,000 | Same |
| £312,000 and above | £10,000 | £4,000 | £6,000 worse |
*Annual Allowance shown takes into account tapering rules, where applicable. Note that tapering occurs at the rate of £1 for each £2 of income above the Adjusted Net Income Threshold. The maximum reduction in the Annual Allowance due to tapering is £30,000 in 2019/20 and £36,000 in 2020/21.
March 11th, 2020
The Minerva SIPP can invest in a wider range of assets including commercial property and land, on an individual or group basis. Any combination of permitted investments may be made within a Minerva SIPP including deposit accounts, DFM, open market platform/wrap accounts, stockbroker accounts and trustee investment plans, all held together within the same SIPP.
SIPP Lite is a lower cost option, for those that do not require multiple investment accounts, or access to commercial property and land at outset. SIPP Lite members are restricted to a maximum of one investment account, to run alongside the default SIPP bank account. This investment account could be another bank account or ONE of the following: stockbroker account, DFM, open market platform/wrap account or a trustee investment plan. For individuals that require additional investments at a later date, including commercial property and land, they can upgrade their SIPP Lite plan to a Minerva SIPP.
A Small Self-Administered Scheme (SSAS) is a type of UK registered pension scheme. Each SSAS is governed by its own trust deed and rules and is a separate legal entity to the sponsoring employer. The sponsoring employer establishes the SSAS and invites members to join. Any individual employed by the sponsoring employer (or a participating employer) may join the scheme and all members are appointed as trustees alongside the professional trustee. SSAS trustees have a very wide range of investment options, including the ability to make secured loans to the sponsoring employer of up to 50% of the net asset value of the scheme, subject to certain conditions.
We have been operating in these markets for over 20 years. The SSAS business was formed in 1997, and in 2003 we launched our flagship product, the Minerva SIPP. The range is completed by SIPP Lite, which has been available since July 2012.
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