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Contribution Limits and Earnings Caps for UK Pensions

 

Prior to April 2006 there were various limits placed on what you could contribute into your pension. (See UK Pension contributions pre 2006)

Since then much simpler, more flexible rules have been introduced to personal and company pension schemes.

 

The new pension contribution rules

You can contribute as much as you like into several different pension schemes (personal and/or company) every year.

There is no longer any upper limit to the total pension pot amount you can build up

Every year you will get tax relief on your contributions of up to 100 per cent of your earnings. This is subject to an 'annual allowance' above which tax will be charged.

This allowance will rise each year until it reaches £255,000 in 2010.

Even if you have hardly any or no earnings at all, you can still get tax relief; for every £80 you contribute to a pension in any tax year. Plus the government will also contribute another £20 into your pension pot - until the total value of your pension contributions reaches £3,600 for the year.

 

For the full and latest details go to the UK Government's advice web site

 

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