When you join, provided it’s your first opportunity to join, ITV may invite you to backdate your contributions to kick start your ITV DC savings - you’ll have 3 months to decide.
|If you contribute…||+||ITV will top up your savings by an extra…||=||The total you’d be saving would be…|
Whether or not you participate in the ITV DC Plan through salary sacrifice, you get tax savings on your contributions up to certain limits. So the actual reduction you’ll see in your take-home pay will be less.
The ITV DC Plan is a tax-registered pension scheme. This means that HM Revenue & Customs (HMRC) places allowances on the amount of retirement savings you can make each year and build up over your working life and still benefit from tax savings.
You’re responsible for monitoring how your retirement benefits from all pension schemes measure against these allowances, so it’s important to make sure you understand how these allowances may affect you. ITV Pensions can help you understand how your benefits are building up, but if you’d like advice about saving tax efficiently for retirement you'll need to speak to an impartial financial adviser. Below is an overview of the tax allowances.
This is the amount of retirement savings you can build up tax efficiently in any tax year.
The standard Annual Allowance for the 2019/20 tax year is £40,000. However, the Annual Allowance will reduce if your ‘Adjusted Income’ exceeds £150,000 in a tax year. Your Adjusted Income includes all your UK taxable income (such as salary, bonus and other taxable benefits, bank interest, dividend income and taxable rental income), plus any pension contributions made by you and your employer. For every £1 of Adjusted Income over £150,000, the Annual Allowance will reduce by 50p from £40,000 to a minimum of £10,000. If you think you may be affected please contact ITV Pensions to discuss further.
Currently, any allowances you do not use in one year can be carried forward for up to 3 years.
All retirement savings made into UK registered pension schemes for the period 6 April to 5 April are measured against the Annual Allowance. This includes:
Any retirement savings you make above the Annual Allowance will be subject to the Annual Allowance charge. The amount of tax you would have to pay depends on the income tax rate that applies to you.
Money purchase Annual Allowance
If you take any defined contribution savings (including savings you’ve built up by paying extra contributions) as cash (other than the 25% tax-free cash sum) or through flexible drawdown, or you exceed the income limit for capped drawdown, you’ll have a lower Annual Allowance (called your Money Purchase Annual Allowance) of £4,000 from April 2017. This allowance applies to both your own and ITV’s contributions and any other contributions paid on your behalf. You won’t be able to carry forward any unused allowance for the previous 3 tax years. If you’re currently contributing to the ITV DC Plan and access defined contribution savings from another pension scheme in this way, you need to let ITV Pensions know within 91 days of accessing your benefits that the reduced Annual Allowance applies.
The Lifetime Allowance
This is an allowance on the amount of retirement benefits you can build up tax efficiently over your lifetime. It includes retirement benefits you’ve built up away from ITV but excludes any State benefits and any pension benefits you’ve not built up in your own right (for example spouse’s pension). For the 2019/20 tax year, the Lifetime Allowance is £1,055,000.
All retirement savings from UK registered pension schemes are measured against the Lifetime Allowance. This includes:
Any retirement savings in excess of the Lifetime Allowance will be subject to the Lifetime Allowance charge. This is 25% for any excess benefits taken as pension (this applies in addition to any income tax deducted from your pension under PAYE) and 55% for benefits paid as a lump sum.
You’re responsible for monitoring how your pension benefits from all pension schemes measure up against these allowances. ITV Pensions can help you understand how your benefits build up but if you would like advice about saving tax efficiently for retirement you’ll need to speak to an impartial financial adviser.