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Beginners’ Guides
Beginners’ guide to pensions and retirement
Is there any upper limit to how much I can pay in?
No, but you should be aware of the following:
- Tax relief is only available on contributions that don’t exceed your relevant UK earnings, or £3,600 if higher, in each tax year. Relevant UK earnings are income from employment or self-employment, subject to UK tax. Your pension provider may not be able to accept contributions which do not qualify for tax relief.
- If the total contributions to all your pension plans in any tax year, including any by your employer, are more than the Government’s Annual Allowance, you’ll normally be liable to pay a tax charge based on your highest rate of income tax. The Annual Allowance is set at £50,000 for the 2011/2012 tax year.
If the total value of your pension benefits is more than the Government’s Lifetime Allowance, a tax charge will normally be deducted from the excess amount, before it is paid out. The Lifetime Allowance for the 2011/2012 tax year is set at £1.8 million.
The information on this page is based on current tax rules, which may change in the future.
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