Pension premiums

There is no limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.

If total pension input exceeds the annual allowance of £50,000 there is a tax charge at 40% on the excess. This limit does not apply in the year that full pension benefits are taken. This is subject to transitional provisions and utilising unused allowances from previous years. Total pension input is the increase in value of the aggregate of all the individual’s pension savings. The pension input period is usually the year to the anniversary date which falls within the relevant tax year.

2012 and beyond

As a consequence of the Government's spending review the annual allowance and lifetime allowances are to be reduced as follows: