FACTS & FIGURES
ALLOWANCES
Annual Allowance
The Annual Allowance (AA) will be reviewed and set every five years for the following five years by a Treasury Order.
The annual allowance sets the upper limit on the tax efficient yearly contribution or on the accrual received in a defined benefits scheme for an individual.
| Tax year | AA | Tax year | AA | |
| 2006/2007 | £215,000 | 2011/2012 | £50,000 | |
| 2007/2008 | £225,000 | 2012/2013 | £50,000 | |
| 2008/2009 | £235,000 | 2013/2014 | £50,000 | |
| 2009/2010 | £245,000 | 2014/2015 | £50,000 | |
| 2010/2011 | £255,000 | 2015/2016 | £50,000 |
For information on how much you can contribute and the tax implications please click here.
Lifetime Allowance
The lifetime allowance (LTA) sets a ceiling on the total value of pension funds an individual can accumulate with tax relief.
The LTA is set every five years by a Treasury Order. There is no set formula for increases.
At any point you take benefits, the aggregate value of all your pension funds and benefits will be tested against the LTA.
If your aggregate funds and benefits exceed the LTA, any funds you are crystallising may be liable to the lifetime allowance charge. This is also dependent on any transitional protection you may have.
| Tax year | LTA | Tax Year | LTA | |
| 2006/2007 | £1.50m | 2011/2012 | £1.80m | |
| 2007/2008 | £1.60m | 2012/2013 | £1.80m* | |
| 2008/2009 | £1.65m | 2013/2014 | £1.80m* | |
| 2009/2010 | £1.75m | 2014/2015 | £1.80m* | |
| 2010/2011 | £1.80m | 2015/2016 | £1.80m* |
*From April 2012, the lifetime allowance will be reduced from £1.8m to £1.5m. There in an intention to provide protection from the reduction in the lifetime allowance to those who may be immediately affected by this reduction. The form of this protection is yet to be decided and the Government will be working with interested parties over the coming weeks to draft a proposed solution.
