There is no financial 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 (gross). If total pension input exceeds the annual allowance of £40,000 there may be a tax charge on the excess. The annual allowance may be reduced by £1 for every £2 of adjusted income over £150,000 to a minimum of £10,000.
|Maximum age for tax relief||74|
|Minimum age for taking benefits||55|
|Lifetime allowance charge – lump sum paid||55%|
|Lifetime allowance charge – monies retained||25%|
|on cumulative benefits exceeding||£1 Million*|
|Maximum tax-free lump sum||25%*|
* Subject to transitional protection for excess amount.