The Government plans to align the period over which the amount of money saved into a pension is measured with the tax year.
Under current rules, the pension input period against which the annual allowance is tested does not have to be aligned with the tax year, and in many cases is not.
However, from next year all PIPs will begin on 6 April and last for 12 months.
All PIPs open on 8 July 2015 will end on 8 July 2015. The next PIP will be 9 July 2015 to 5 April 2016.
Because some people may have put in savings worth more than £40,000 ahead of the Budget, HMRC has introduced transitional protections so that in these circumstances an annual allowance of £80,000 applies for 2015/16.
Wingate Financial Planning director Alistair Cunningham says: “This is a sensible proposal to avoid the complex situation where an individual has a fluctuating tapered annual allowance, carry forward and pension input periods that are not aligned to tax year.
“It is not without problem though as both self-employed and employed individuals will not know their total income until late in the tax-year, and therefore will not know the level of their annual allowance.
“Non-aligned PIPs overcome this problem by allowing pension funding for tax relief in one year, but with a test against the annual allowance in the following year.”