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    Pension Premiums

  • Go to ...
  • standard lifetime allowance
  • member contributions annual allowance charge
  • money purchase allowance
  •  


    Standard Lifetime Allowance
    Tax Year Amount
    2016-2017 £1,000,000
    2015-2016 £1,250,000
    2014-2015 £1,250,000
    2013-2014 £1,500,000
    2012-2013 £1,500,000
    2011-2012 £1,800,000
    2010-2011 £1,800,000
    2009-2010 £1,750,000
    2008-2009 £1,650,000
    2007-2008 £1,600,000
    2006-2007 £1,500,000

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    Member Contributions
    Annual Allowance Charge
    Tax Year Amount
    2016-2017 £40,000 *
    2015-2016 £40,000
    2014-2015 £40,000
    2013-2014 £50,000
    2012-2013 £50,000
    2011-2012 £50,000
    2010-2011 £255,000
    2009-2010 £245,000
    2008-2009 £235,000
    2007-2008 £225,000
    2006-2007 £215,000

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    Money Purchase
    Annual Allowance
    Tax Year Amount
    2016-2017 £10,000
    2015-2016 £10,000

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    Notes

    1. Any contributions in excess of £40,000 (2015-16 also £40,000) whether personal or by the employer, may be subject to income tax on the individual at the appropriate rate (2016-17: 20%, 40%, 45%).
    2. Tax relief is limited to relief on contributions up to the higher of 100% of relevant earnings or £3,600.
    3. Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward or back for three tax years.
    4. Employers will obtain tax relief on employer contributions if they are paid and made 'wholly and exclusively'. Tax relief for large contributions may be spread over several years.
    5. There is a lifetime allowance excess charge. If the excess is drawn as cash the rate is 55% and if drawn as income 25%.
    6. High Earner's tapered annual allowance.
      Some high income individuals will face a cut in the amount of tax-efficient pension saving they can make from 6 April 2016.
      The standard £40,000 annual allowance (AA) will be reduced by £1 for every £2 of 'adjusted income' individuals have over £150,000 in a tax year, until their AA drops to £10,000. So someone with income of £210,000 would see their AA cut by £30,000.
      But not everyone who fails the 'adjusted income' test will see their AA cut.
      There is a second test which can help some people who are caught simply because pension savings exceed £40,000 in the tax year. So, even if their adjusted income exceeds £150,000, their AA won't be cut if their 'threshold income' is £110,000 or less for the tax year.
      Here's what's included for each test:
    Adjusted Income

    Above £150k = AA tapered
    Threshold Income

    £110k or below = full £40k AA available
    Included
    • Total income before tax from all sources (ignoring deductions for pension contributions).
    • The value of employer pension contributions.
    Included
    • Total income before tax from all sources.
    • New salary sacrifice arrangements (started after 8 July 2015).

    Deductions
    • None.
    Deductions
    • The individual's pension contributions.

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    Click Here to download the abacus Tax Tables pdf booklet

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