Contributing to your pension
You are able to contribute to your pension each tax year, subject to certain limits that we explore below.
The information on this page is not advice. Please speak with your financial adviser before making any financial decisions.
Contributing to your pension
Personal, employer and third party contributionsA contribution is an amount paid into a pension by an individual, their employer, or another third party. There is no limit on the amount that you can put in your pension each year. However, there is a limit on the amount that you can contribute whilst benefitting from tax relief.
Contributions are paid in cash. A contribution is different from a transfer, which is when money already held in a pension is moved from one provider to another.
You can find out more about tax relief in our helpful fact sheet.
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Personal contributions |
Contributions made by you to your pension. This can be a regular contribution by direct debit, or a one off payment |
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Employer contributions |
Contributions made to your pension by your employer. Your pension with Curtis Banks is a private pension, not a workplace pension, however your employer can still contribute by way of regular or ad hoc contributions. Employer contributions are paid into the pension gross, and whilst they are taken into account when it comes to the annual allowance, they are not restricted to the amount that you earn |
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Third party contributions |
Contributions made by a third party to your pension (i.e. not made by you personally or your employer). |
The Annual Allowance
The annual allowance is the maximum value of pension savings you can make each year while benefiting from tax relief.
Think of it this way: your income each year determines how much tax relief you can claim, and the annual allowance determines how much you can keep.
The standard annual allowance for the 2024/25 tax year is £60,000. However, there are variations which may affect you.
If you haven’t fully used your annual allowance in previous tax years you may be able to use carry forward to get a higher annual allowance.
Remember that the annual allowance does not apply per pension scheme; it applies to all of your pensions collectively.
If you are a high earner, or if you have already accessed some of your pension benefits, you may be subject to the tapered annual allowance or money purchase annual allowance (or both).
Please read our separate fact sheets on these topics for more information.
Annual Allowance charges
If you exceed your annual allowance, you will incur an annual allowance charge on the excess amount. The annual allowance charge amount is found by calculating how much income tax would be due if the excess amount was added to your income for the year. If you exceed your annual allowance, you’ll need to tell HMRC by including the details on your Self Assessment tax return.
There are two ways to pay an annual allowance charge. You can either pay the charge yourself by way of your Self Assessment tax return, or under some circumstances you can arrange for your pension scheme administrator to pay the charge and reduce your pension accordingly. Please read our guidance note, ‘Paying an Annual Allowance Charge from your Pension’, for more information.