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What is the annual pension allowance?
What is the annual pension allowance?

A practical guide to UK pension allowances.

Updated over a week ago

The pension allowance is the limit on the tax benefits of paying into pensions. This is set by the government and applies across all your pensions.

In the 23/24 Tax Year, the maximum amount you can contribute to your pension and qualify for tax relief is your annual income, or £60,000 (whichever is lowest). If you’re a high earner, your allowance will be reduced by £1 for every £2 you earn above £260,000 (to a minimum of £10,000).

If you don’t earn anything, you’ll only receive tax relief on up to £3,600.

As stated above, you may be able to use unused allowances from previous tax years. Should your contributions exceed the amount you are allowed each year, there may be tax to pay, so you should speak to an accountant or tax adviser before making any large contributions to make sure you’re not going to incur a tax bill.

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