Limits and taxation
The Government sets limits on both the amount of pension savings an individual makes each year (the Annual Allowance) and the total amount of savings built up (the Lifetime Allowance). The current limits are:
Annual Allowance - £40,000 - in any one tax year.
Lifetime Allowance - £1.03m - increasing to £1.055m for the 2019/20 tax year.
The Annual Allowance may be reduced if your income exceeds £150,000 in any one tax year, or you access any of your pension savings using the additional flexibility provided by ‘Pension Freedoms’.
If you exceed either of these limits you will become liable for additional tax.
If you believe you may exceed these limits you should speak to an Independent Financial Adviser.
We recommend you only take advice about your pension from an Independent Financial Adviser, regulated by the Financial Conduct Authority. To find a financial adviser go to www.unbiased.co.uk
The Money Advice Service
You can find independent information on personal finance, including pensions here: www.moneyadviceservice.org.uk
The Pensions Advisory Service
For free and impartial guidance on pensions, visit www.pensionsadvisoryservice.org.uk
If you need further tax information, please contact HMRC by visiting www.hmrc.gov.uk or calling 0300 200 3300.