Pensions glossary of terms

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Pensions glossary of terms

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

Annual allowance

The annual allowance is the maximum amount which can be contributed (or deemed to be contributed) in a pension input period without the member incurring a tax charge.

The annual allowance for 2023/24 onwards is £60,000. The annual allowance from 2014/15 to 2022/23 was £40,000.

The annual allowance is tapered where an individual’s adjusted income is over the high income threshold of £260,000 (£240,000 for tax years 2020/21 to 2022/23 inclusive) and their threshold income is over the permitted amount of £200,000 (which has applied since 6 April 2020). The amount of the annual allowance is reduced by £1 for every £2 of the excess over the threshold for the tax year down to a minimum of £10,000 (£4,000 for tax years 2020/21 to 2022/23 inclusive).

The annual allowance and the tapering of the annual allowance is discussed in detail in the Annual allowance guidance note.

Automatic enrolment

Employers are required to automatically enrol eligible employees into a qualifying pension scheme and make contributions on the employees’ behalf. Employees may voluntarily opt out

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+™
  • 13 Nov 2025 11:41

Popular Articles

Enterprise investment scheme tax relief

Enterprise investment scheme tax reliefOverview of EIS tax reliefsThe enterprise investment scheme (EIS) offers significant tax reliefs to encourage individuals to invest money in qualifying shares issued by qualifying unquoted companies. The scheme is designed to encourage investment in small,

Read more Read more

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more

Indexation allowance and rebasing

Indexation allowance and rebasingThis guidance note explains the general rules surrounding the availability of indexation allowance (which was frozen at December 2017) on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview

14 Jul 2020 11:59 | Produced by Tolley Read more Read more