Annual allowance

The annual allowance (AA) is the maximum annual value of new pension savings (contributions and benefit accrual) on which an individual can benefit from tax relief.

Tax year AA
Tax year AA
2006/2007 215,000
2012/2013 50,000
2007/2008 225,000
2013/2014 50,000
2008/2009 235,000
2014/2015 40,000
2009/2010 245,000
2015/2016 40,000


If your income (including the value of any pension contributions) is over 150,000, your annual allowance may be reduced. Please refer to the Tapered Annual Allowance factsheet for further details.

Money purchase annual allowance

The money purchase annual allowance (MPAA) is a further restriction on the personal and employer contributions made to money purchase pensions that can benefit from tax relief. The limit for 2018/2019 is 4,000.

It is triggered as soon as you withdraw income from your plan using one of the new withdrawal solutions, such as an uncrystallised fund pension lump sum (UFPLS) or a flexi-access drawdown (FAD).

There is more information on how much you can contribute and the tax implications here.

Lifetime allowance

The lifetime allowance (LTA) sets a ceiling on the total value of pension funds an individual can accumulate with tax relief.

When you take benefits, the value of all the funds you are crystallising 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 2012/2013 1.50m
2007/2008 1.60m 2013/2014 1.50m
2008/2009 1.65m 2014/2015 1.25m
2009/2010 1.75m 2015/2016 1.25m