What is Pension Annual Allowance?
The Annual Allowance is the maximum amount you can save into all your pension schemes each tax year without incurring a tax charge.
The Annual Allowance for 2025/26 is £60,000.
What Counts Towards Your Allowance?
The Annual Allowance includes EVERYTHING:
- Your personal contributions
- Employer contributions (including ours!)
- Salary sacrifice arrangements
- Contributions to workplace pensions
- Any other pension schemes you have
It's the total across ALL your pensions in a given tax year, not per scheme!
Whilst for most people the standard Annual Allowance is £60,000 per tax year, this can be lower for higher earners or those who have already flexibly accessed their pension benefits, or higher if you are able to take advantage of 'carry forward' allowances from previous tax years. You can find out more about this here.
Why This Matters
Exceeding your Annual Allowance might mean extra tax charges!
By staying aware of your contributions throughout the year, you can:
- Avoid nasty tax surprises at year-end
- Make informed decisions about contribution amounts
- Maximise your retirement savings without penalties
Getting your contribution amount right means maximum retirement savings
without tax penalties! ⚖️