Pension tax charge
Please advise me about the proposal announced in this year's Budget to restrict tax relief on pension contributions for those earning over £150,000 in the current tax year or in the previous two tax years.
I think this will catch me as my total taxable earnings in 2007/8 were £193,842. My total NHS pension contribution in 2007/8 was £46,038. It seems that I would be liable to the new 20 per cent tax charge on any additional personal pension contributions in this tax year, but that I will be able to continue to claim full 40 per cent tax relief on my current level of NHS Pension contributions.
From 31 December 2009, when I will be 60, I cannot continue to buy added years (currently at 9 per cent), which represents about a third of my current contributions.
I do not intend to retire for a few years yet. Would it be worthwhile transferring to the new NHS Pension Scheme (NHSPS) that runs to age 65?