Annual allowance

UK Pensions. The maximum amount of pension saving an individual can have each year that benefits from tax relief. This includes pension savings that members make personally plus any pension savings made by someone else on behalf of the member, for example, an employer.

There is no limit on the amount an individual can save in a pension scheme, but there is a limit on the amount that can get tax relief each year. If a member's pension saving is more than the annual allowance a tax charge is payable on the amount over the annual allowance. This tax charge is called the annual allowance charge.

See also

• Annual exempt amount
• Annual Investment Allowance
• Defined contribution pension scheme
• Earnings cap
• Lifetime allowance
• Personal allowance