Coronavirus - we're here to help
From how to access your account online, scam awareness, your wellbeing and our community we're here to help.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log in to HL Account

What are the pension contribution limits?

The following tax facts should be viewed as an indication of the rates and allowances available and relate to the current tax year (2020/2021) unless stated otherwise. Tax law is notoriously complex and we cannot replicate every rule, nuance or exemption here. Therefore you should not make, or refrain from making, any decisions based on this information alone. If you are in any doubt as to the suitable course of action we recommend you seek tax advice. Remember tax rules can change and depend on your personal circumstances.

Relevant UK earnings (usually earnings from employment or self-employment) Maximum personal or employee contribution for tax relief
£0 - £3,600 £3,600
£3,601 and over 100% of earnings
Relevant UK earnings (usually earnings from employment or self-employment) Maximum personal or employee contribution for tax relief
£0 - £3,600 £3,600
£3,601 and over 100% of earnings

Annual allowance: £40,000. A £4,000 money purchase annual allowance will apply for those who have flexibly accessed their pensions.

Tapered annual allowance: If your threshold income is over £110,000 then your annual allowance will be reduced by £1 for every £2 that your adjusted income income is over £150,000; to a minimum annual allowance of £10,000.

Threshold income is, broadly, all taxable income plus salary sacrificed for pension contributions on or after 9 July 2015 minus personal or employee (not via salary sacrifice) pension contributions.

Adjusted income is, broadly, all taxable income plus employer pension contributions (including via salary sacrifice) plus some benefit accrual in defined benefit, e.g. final salary, pension schemes.

Please see our annual allowance factsheet

Lifetime allowance: £1,055,000. If the value of pension rights exceeds the lifetime allowance on death, at retirement or at age 75, the excess could be taxed at up to 55%.

Still need help?

Contact us

Email us