The annual allowance will be reviewed and set every five years for the following five years by a Treasury Order. There is no set formula for increases but it cannot decrease.

The annual allowance (AA) sets the upper limit on the tax efficient yearly contribution or on the accrual received in a defined benefits scheme for an individual.

For information on how much your client can contribute and the tax implications please click here.

Please note:
The annual allowance is currently under review, with a decision being expected in July 2010. For more information, please see the Budget information on the HMRC website.