Pension tax allowances
Pension tax allowances are limits on how much you can pay into a pension over a year (Annual Allowance, and Money Purchase Annual Allowance) and build up in a pension over the course of your working life (Lifetime Allowance). Read the Tax summary factsheet for an overview.
The Annual Allowance is £40,000 for most people but it might be lower if you’re a high earner. If you take your pension benefits flexibly a Money Purchase Annual Allowance of £4,000 a year may apply. Read the Annual Allowance factsheet for more information.
The Lifetime Allowance from April 2018 is £1.03 million. Read the Lifetime Allowance factsheet for more information.
If you go over these limits, you may have to pay a tax charge. These pension tax allowances are unlikely to affect the majority of our members.
We’ve produced several in-depth factsheets and worksheets that explain these limits in more detail. However, if you think you may be affected by these limits, you should consider getting independent financial advice.