Pension Premiums
There is no limit on the amount that may be contributed to a registered pension scheme. The maximum amount on which an individual can claim tax relief in any tax year is the greater of the individual's UK relevant earnings or £3,600.
If total pension input exceeds the annual allowance of £235,000 there is a tax charge at 40% on the excess. This limit does not apply in the year that full pension benefits are taken.
| Maximum age for tax relief |
74 |
| Minimum age for taking benefits |
50 |
| Lifetime allowance charge |
- lump sum paid |
55% |
|
- monies retained |
25% |
| on cumulative benefits exceeding |
£1,650,000* |
| Maximum tax-free lump sum |
25%* |
| *Subject to transitional protection for excess amount. |
2009 and beyond
The annual allowance and lifetime allowances already announced.
| |
Annual allowance |
Lifetime allowance |
| 2009/10 |
£245,000 |
£1,750,000 |
| 2010/11 |
£255,000 |
£1,800,000 |
Notes
Transitional reliefs are available to protect pension rights built up before 6 April 2006 by registering and protecting those rights, including lump sum rights in excess of £375,000. A claim for this transitional relief must be made by 5 April 2009. Certain pre-existing lump sum rights of more than 25% are automatically protected.
