The annual allowance limits the amount of tax relievable pension savings that can be made by or on behalf of an individual each year. Since the 2015/16 tax year, pension input periods have been aligned with tax years. Under a money-purchase scheme this is simply the value of the contributions paid in a pension input period. However, under a defined benefit or cash balance scheme it is the increase in the value of an individual's rights over the scheme's pension input period.
Rates & Factors: Annual allowance & money purchase annual allowance