Annual Allowance

The Annual Allowance limit is £40,000 for the tax year 2016/17

Annual Allowance is the maximum growth in the
value of your Annual Allowance Page V1pension savings each year that can
benefit from tax relief.

This includes any benefits you have accrued within the Civil Service Pension arrangements and any other registered pension arrangements during 2016/17.

If the growth in the value of your pension savings is more than the Annual Allowance limit, you may have to pay a tax charge on the amount over the limit.

There is no limit on the amount of pension savings you can make each year, but there is a limit on the tax relief for those pension savings.

Any of the following circumstances could increase the amount of Annual Allowance you use:

  • Buying added pension;
  • Contributing towards other pension savings such as Additional Voluntary Contributions (AVCs);
  • Receiving a significant pay rise;
  • Leaving your job on ill health retirement with an enhancement to your service (please see the separate fact sheet on this specific issue – ‘Impact of Annual Allowance on ill health retirement’ using this link);
  • Transferring any service you may have from another pension scheme under the Club Transfer terms;
  • Aggregating or linking a previous period of employment from the Civil Service (joining up your current period of service with a previous period of service).

Aligning Pension Input Periods

HM Revenue & Customs (HMRC) has now aligned Pension Input Periods with the tax year.

The current Pension Input Period relating to your statement is :

  • 6 April 2016 – 5 April 2017.

Your statement contains Pension Input Amounts for the previous three years.

The Pension Input Period for those years are as follows:

Tax year

Pension Input Period

2013/14

01/01/2013 – 31/12/2013

2014/15

01/01/2014 – 21/12/2014

2015/16

01/01/2015 – 08/07/2015

09/07/2015 – 05/04/2016

More information

HMRC provides further information on Annual Allowance which can be found by using this link.