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).
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.
The Lifetime Allowance is £1,073,100 from the 2020/2021 tax year.
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.
Read the Tax summary factsheet for more information. If you think you may be affected by these limits, you should consider getting independent financial advice.