Glossary · UK
What is Pension Annual Allowance?
Max £60,000 you can contribute to pensions per year with tax relief.
Full Definition
The Pension Annual Allowance limits how much you can contribute to all UK pensions in a tax year and receive tax relief. For 2025/26 the standard allowance is £60,000 (or 100% of your earnings, whichever is lower). For high earners (adjusted income above £260,000) the allowance tapers down by £1 for every £2 of income above £260k, to a minimum of £10,000. After accessing pension via drawdown, the Money Purchase Annual Allowance (MPAA) restricts future contributions to £10,000/year. Unused allowance from the previous 3 tax years can be carried forward.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.