Finance Act 2004—figures, rates and limits
Finance Act 2004—figures, rates and limits

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Finance Act 2004—figures, rates and limits
  • Annual allowance
  • Lifetime allowance
  • Tax charges and rates
  • Lump sum limits (other than for death benefit lump sums)
  • Death benefit lump sum limits

Annual allowance

The annual allowance is the maximum amount by which the value of an individual’s pension savings across all the registered pension schemes of which they are a member may increase in any year without tax penalties arising. Employer contributions also count towards the annual allowance. Annual allowance figures are shown in the table below.

The annual allowance charge is levied where the annual allowance is exceeded.

For further information generally, see Practice Note: The annual allowance.

Tax year Annual allowance (£) Source
2020/2021 onwards £40,000, subject to:
  1. tapering for individuals with an ‘adjusted income’ in excess of £240,000 p.a. and a ‘threshold income’ in excess of £200,000 p.a. Tapering will be a reduction of £1 for every £2 by which their income exceeds £240,000, subject to a maximum reduction of £36,000 for those with an adjusted income of £312,000 p.a. or more, and

  2. money purchase annual allowance of £4,000

Alternative annual allowance: £36,000
Spring Budget 2020: rates and allowances
Spring Budget 2020 document, para 2.28
2017/2018 — 2019/2020 £40,000, subject to:
  1. tapering for individuals with an ‘adjusted income’ in excess