The most you can pay into pensions and still get tax relief is £60,000 per year or 100% of your earnings, whichever is lower. This limit is called the annual allowance and it includes:
- your pension contributions
- employer pension contributions
- any tax relief you receive
- third party pension contributions (for example, from a spouse)
You can learn more about the annual allowance on the HMRC website.
There is also the lifetime allowance, which is a limit on how much you can build up in pensions in total over your lifetime.
However, the tax charges for going over the lifetime allowance were abolished on 6 April 2023. From April 2024 the lifetime allowance will be abolished entirely.
This means that you’ll still usually be able to take up to 25% of your pension tax-free, with the rest taxed as an income. But you will not pay any extra tax charges for going over the lifetime allowance.
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