The personal pension rules were radically revised with effect from 6 April 2001, with the result that there are some new year-end planning points to consider.

Most people under the age of 75, who are not controlling directors, are now eligible to contribute to a personal pension. Even if you are a member of you employer's occupational pension scheme you can generally contribute up to £2,808 a year net of basic tax relief. However, in general you can't contribute if you are in an employer's occupational pension scheme and you:

• had earnings shown on your 2000/01 P60 exceeding £30,000 and
• had no other source of earned income (eg. Freelance work) in this tax year.

Even if you had no earnings whatsoever, you are still allowed to contribute up to £3,600 a year and receive tax relief at source of up to £792 - a net cost of £2,808. Contributions can also be made by, or on behalf of, your children or non-working spouse. If you are retired, it could pay you to make a contribution and immediately draw your benefits.

If you are not a member of your employer's occupational pension scheme, it is possible to make contributions above £3,600 a year, based on your earnings and age. We can calculate exactly how much you can contribute.

Additional Voluntary Contributions (AVCs)

If you are a member of your employer's occupational scheme, you can normally pay AVCs of up to 15% of your earnings (including the taxable value of fringe benefits), less any compulsory pension contributions you make. But if you are also eligible to contribute to a personal pension (see above), this may well be a better way to boost your retirement benefits.