What is the pension annual allowance?
The annual allowance is the total amount you or your employer can normally pay into your pension each tax year before having to pay tax charges. The standard pension annual allowance is currently set at £40,000.
Understanding your annual allowance
Your total income and whether you've started taking money from your pension pot can affect your allowance. When it comes to managing it, here's what you should consider:
The value of investments can go down as well as up. It’s possible they may be worth less than was invested. Remember, tax rules and legislation can change and the value of tax benefits depends on your individual circumstances. This information is based on our understanding in April 2020.
Access to impartial guidance
We recommend you seek appropriate guidance or advice before you make any decisions. An adviser is likely to charge a fee for this. You can also get free impartial guidance over the phone or face to face with Pensionwise. Go to pensionwise.gov.uk or call 0800 138 3944. Make sure you understand all your retirement options by reading the Money Advice Service guide – Your pension: your choices
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