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In this section
Tapered annual allowance
The annual allowance of £60,000 may be reduced or ‘tapered’ if your ‘threshold income’ (your annual income before tax less any personal pension contributions and ignoring any employer contribution) is over £200,000.
If it is below £200,000 the tapered reduction will not normally apply.
If your threshold income is above £200,000, then you need to check if your ‘adjusted income’ (your annual income - broadly all income that you are taxed on including dividends, savings interest and rental income - before tax plus the value of your own and any employer pension contributions) is over £260,000. If it is above £260,000, the annual allowance will reduce by £1 for every £2 that your ‘adjusted income’ exceeds £260,000.
The maximum reduction is £50,000 which reduces the annual allowance to £10,000 but only once adjusted income reaches £360,000 or more.
Similar tapering applies to the alternative annual allowance if you are an active member of a defined benefit (final/career average salary) pension.
For more detailed information on the income definitions and how you can calculate your allowance if you think you are affected see our tapered annual allowance guide.
Read our guide to find out whether the tapered annual allowance could affect you and what happens if you exceed the allowance.
Important information - please keep in mind that the value of investments, and the income from them, can go down as well as up so you may get back less than you invest. Eligibility to invest in a SIPP and tax treatment depends on personal circumstances and all tax rules may change in the future. You cannot normally access money in a SIPP until age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.