Yes. You can get tax relief on your pension contributions. Your employer takes your contributions from your pay before working out the tax, so you will automatically receive full income tax relief. This is subject to HM Revenue & Customs limits. HM Revenue & Customs can ask you to pay back any tax relief you get above the relevant limits.
Is my pension taxed when it is paid?
When your pension is paid, it will be taxed as income in the same way as a salary.
HM Revenue & Customs will give you a tax code that the scheme administrator will apply to your pension so that you are paying the correct level of tax.
Is my pension lump sum taxed when it is paid?
If you have chosen to take a lump sum in exchange for some of your pension, this payment is currently tax-free.
What is the Annual Allowance?
The Annual Allowance is set by HM Revenue & Customs and any changes to the Annual Allowance are made by HM Revenue & Customs. Annual Allowance is the maximum value of the growth in your pension savings each year that can benefit from tax relief.
If the growth in your pension savings over the tax year are more than the Annual Allowance, you might have to pay a tax charge based on the amount of the Annual Allowance.
You can request a pension savings statement from the Scheme Administrator (MyCSP) to check your pension against the Annual Allowance.
What is the Lifetime Allowance?
The Lifetime Allowance (LTA) is the limit on the amount of pension benefit(s) that you can take from all of your registered pension arrangements before you incur a tax charge.
These benefits include:
lump sums; and
You can find more information on the Lifetime Allowance on either the HM Revenue & Customs or GOV.uk website.