Britons warned of charges as pension savers being ‘caught out by the system’ | Personal Finance | Finance

From 2019 to 2020, 42,350 taxpayers reported pension contributions exceeding their AA through Self-Assessment and the total value of contributions reported as exceeding the AA was £950 million between 2019 to 2020. This represents an increase from £820 million in 2018 to 2019 and £910 million in 2017 to 2018.

As a result, 21,410 AA charges were reported by schemes. The total value of AA charges reported by schemes for tax year 2019 to 2020 was £253 million, a 20 percent increase from £210 million reported for 2018 to 2019.

There has also been an increase in people exceeding their lifetime allowance. 8,510 Lifetime Allowance (LTA) charges were reported by schemes in 2019 to 2020 and the total value of LTA charges reported was £342 million. This is a 21 percent increase from £283 million in 2018 to 2019.

The Government has said reductions in the annual and lifetime pensions tax allowances since 2010 have contributed to a significant increase in the number and value of charges. In particular, the introduction of the annual allowance taper for high earners in 2016 and the reduction of the money purchase annual allowance in 2017 has been a factor.

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