Prudential’s top five tips before tax year ends

Mr Cameron, a senior tax expert at Prudential, said that 5 April - or 31 March for companies - represented several key planning points for advisers and their clients.

He pointed out that people could contribute to a pension this tax year, allowing them to get access to the annual allowance of £50,000. Mr Cameron said: “As the annual allowance is accrued in the first tax year a person starts saving into a pension scheme, those who have not joined for the first time by 5 April 2014 will find themselves entering a world with a £40,000 annual allowance.

“By making even a nominal contribution to a pension this tax year, people will have access to the £50,000 annual allowance, which they will have four years to use or lose.”

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He said any unused pension annual allowance can only be carried forward for three years, so any unused allowance from 2010/11 needed to be used by 6 April or it will be “gone forever”.

Mr Cameron also warned that after 5 April, retirees will lose the ability to make bigger pension contributions due to the lack of relevant earnings.

He said: “Those retiring next tax year (2014/15) - especially those retiring nearer to April 2014, and wanting to take advantage of the benefits of a final top up need to do so while they still can.

“Also, people looking to enter flexible drawdown are also up against the clock. If this is an option for clients in the new tax year, any final contributions will have to be made before 6 April as a flexible drawdown declaration cannot be made in a tax year where a contribution has been made.”

Mr Cameron also suggested that another group not able to make a contribution next tax year are those availing themselves of Fixed Protection 2014.

He added: “A contribution on 6 April or later would result in the loss of protection, so any final funding is up against the clock.”