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 2019 is £1.055 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, which can be found in the drop down menus below. However, if you think you may be affected by these limits, you should consider getting independent financial advice.