According to new figures, the reduction in the pension allowance (the amount that is able to be contributed to a pension) for those who earn over £100,000 has resulted in the full utilisation of their ISA allowances at higher rates than previously recorded. 

Of the UK's 860,000 high earners, 24% saved £15,240 (the maximum possible at the time) in the 2015-2016 tax year. This compares well with the 2011-2012  tax year where only 16% did so.

These are the most recent figures available from HMRC, but the trend they show is most likely to continue. 

The pensions "lifetime allowance" is another restricting factor as while it has recently climbed to £1.03 million in line with inflation, it is still well down from it's high of £1.8 million.

This has been motivated by the desire of the government to avoid spending on tax relief. The nature of the current system means that higher income earners receive more tax relief than basic rate taxpayers for example, which has led to calls for changes to the system. 

 Since April 2016, those earning over £150,000 have seen their allowance reduced to a range from £40,000 down to a limit of £10,000 per year that kicks in for those earning over £210,000. 

The inclusion of tax relief means that for those on the top tax rate, an investment of £5,500 would max out the £10,000 due to tax relief. 

The reduction in pension allowances has been inversely proportional to the increases in ISA limits with the current allowance of £20,000 the highest ever. 

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The value of investments and income from them may go down as well as up and you may not get back the original amount invested.

Information is based on our current understanding of taxation legislation and regulations which is subject to change.