Pension Contributions Print

There are no limits on the pension contributions that can be paid by individuals or by companies prior to age 75. Individuals are able to pay £3,600 gross per annum without reference to earnings or without having earnings and receive basic rate tax relief at source so if £2,880 is paid it will be grossed up to £3,600.

There is an annual limit on the amount of the pension contributions that qualify for tax relief, whether the premiums are paid by the individual personally, or by other persons on their behalf. For individuals this limit is the lower of 100% of earnings or the Annual Allowance. If the Annual Allowance has been utilised then unused relief from the three previous tax years can be carried forward (see section on carry forward). The Annual Allowance is calculated with reference to Pension Input Periods (“PIPs”) which from 9th July 2015 are aligned to tax years. Prior to this date the PIPs were not always aligned to tax years.

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