What's the annual allowance?
The annual allowance is the amount of pension contributions you can make each year that will receive tax relief. It's based on your earnings for the year, and for 2016/17 onwards is capped at £40,000. There will normally be a tax charge to pay if you contribute more than this amount.
A reduced annual allowance of £10,000 will apply to money purchase pension contributions if you've flexibly accessed pension benefits. The chancellor recently announced in the Autumn statement that the government intends to reduce this to £4,000 on 6 April 2017 and that this may be retrospectively applied back to 6 April 2015. The government is currently running a consultation on this until 15 February with final details likely to be announced in the March 2017 budget.
Find out more information on the annual allowance limits and when the reduced limit applies.