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.

Note - Total pension input is the increase in value of the aggregate of all the individual's pension savings. The pension input period is usually the year to the anniversary date which falls within the relevant tax year.

Note

For those earning between £90 per week and £770 per week, employers receive a rebate of 1.4% on contracted out money purchase schemes or 3.7% on contracted out final salary schemes, and employees, a rebate of 1.6% for either scheme.

2008/09 Tax Library

Introduction Income Tax Capital Gains Tax Corporation Tax Capital Allowances Value Added Tax Inheritance Tax Vehicle Benefits Mileage Allowances NI Contributions Key Dates & Deadlines Pension Premiums Charitable Giving Savings & Investments Some Useful Rates Stamp Taxes