The annual allowance is the amount of money you can invest in a pension and attract tax relief.
The current annual allowance is £40,000* but it may be possible to make a larger contribution as you can carry forward 3 years of unused relief.
* Tapered annual allowance: From April 6 2020, individuals with total taxable income plus employer pension contributions above £240,000 (previously £150,000) during the tax year will face a reduction in their annual allowance by £1 for every £2 in excess of £240,000. The minimum tapered annual allowance has reduced to £4,000 (previously £10,000) and this reduction will affect those with taxable income plus pension contributions above £300,000; with those at £312,000 and over receiving the new £4,000 minimum tapered annual allowance.
The lifetime allowance is the maximum amount that can be held in your pensions without potentially incurring a tax charge on the surplus.
The current lifetime allowance is £1,073,100 (2020/21).
To read our quick guide to the lifetime allowance and current protections available, please click here.