Annual Allowance
The annual allowance is a limit on the amount that can be contributed to your pension each year, while still receiving tax relief. It’s based on your earnings for the year and is capped at £60,000 for most people, though the highest earners may be capped by the Tapered Annual Allowance.

For more information visit www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/the-annual-allowance

Tapered Annual Allowance
The Annual Allowance is reduced for higher earners, called the Tapered Annual Allowance. The Tapered Annual Allowance applies to members of a registered pension scheme with ‘Adjusted Income’ of over £260,000. The Adjusted Income threshold increased on 6 April 2020, and again on 6 April 2023, which meant that some people were no longer affected by the taper, or affected to a lesser degree, and therefore have the ability to make increased pension savings.

For more information visit www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/tapered-annual-allowance

If you would like to know how much has been contributed into your pension in a given year, contact your Scheme administrator, visit Contact us

Pension and Lump Sum Allowances

Prior to 6 April 2024, cash sums and pensions paid in life and death were tested against the Lifetime Allowance (LTA), which has now been removed. Your pension will now be valued against the Lump Sum Allowance. If the value of your pension exceeds the Lump Sum Allowance, you may have to pay an additional tax charge.

If you have applied for some form of Lump Sum Allowance protection, you should notify your administrator and provide them with a copy of the relevant certificate issued by HMRC, if you haven’t already done so. Visit Contact us.

For more information visit www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/lifetime-allowance-for-pension-savings

Protections

Protections are complex but if you believe you previously applied for and received confirmation from HMRC of your pension protection (such as Individual, Fixed or Enhanced Protection); you will need to let your administrator know. Visit Contact us.

For more information visit: www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance.