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

Group relief for carried-forward losses

Group relief for carried-forward lossesThis guidance note examines in detail the relief available to groups for carried-forward losses. The scope excludes the treatment of specialist businesses such as banks, insurance companies and oil and gas companies.From 1 April 2017, companies can surrender

14 Jul 2020 11:50 | Produced by Tolley Read more Read more

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more

Class 1 v Class 1A

Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met

Read more Read more