Tax and pensions

Paying in members

To encourage people to pay into a pension there are special rules on how contributions and some benefits are taxed.

Most people will be able to save as much as they want with full tax relief as their pension savings will be significantly less than the allowances.

There is an annual allowance that limits the amount your pension can increase by each year. This limit is set by Her Majesty's Revenue and Customs (HMRC) and can change each year.

The limit for 2020/21 is £40,000, although there are now special rules for those higher earners earning in excess of £220,000 per annum. Please contact us if you believe you might be impacted by the annual allowance.

There is also a lifetime allowance which limits the amount you can accumulate free of tax in all your pension arrangements when you come to take your benefits. The allowance for 2020/21 is £1,073,100.

You can get more information from the HMRC about the annual allowance here and the lifetime allowance here


You may still have to pay tax on your income when you start to take your pension.

We deduct this via Pay As You Earn (PAYE).