What's the annual allowance?
The annual allowance is the amount of pension contributions you can make each year that will receive tax relief. From 2016/17 onwards this has been capped at £40,000 and includes all contributions made by you, your employer or any third party across all pensions you have. There may be a tax charge to pay if the total contributions exceed this amount.
The value of any tax relief depends on your individual circumstances. This information is based on our understanding of current, taxation law and HMRC practice, which may change.
A reduced annual allowance of £4,000 will apply to money purchase pension contributions if you've flexibly accessed pension benefits.
Find out more information on the annual allowance limits and when the reduced limit applies.
If you earn over £240,000 then you may be affected by the tapered annual allowance. More information on this can be found on the HMRC website.