Tax on your private pension contributions
Your private pension contributions are tax-free up to certain limits.
This applies to most private pension schemes, for example:
- workplace pensions
- personal and stakeholder pensions
- overseas pension schemes that qualify for UK tax relief - ask your provider if it’s a ‘qualifying overseas pension scheme’
Pension schemes must be registered with HMRC to qualify for tax relief. Check with your pension provider if you’re unsure if your scheme is registered or not.
You pay tax when you take money out of a pension.
Limits to your tax-free contributions
You usually pay tax if savings in your pension pots go above:
- 100% of your earnings in a year - this is the limit on tax relief you get
- £40,000 a year - check your ‘annual allowance’
- £1,073,100 in your lifetime - this is the lifetime allowance
You also pay tax on contributions if your pension provider:
- is not registered for tax relief with HM Revenue and Customs (HMRC)
- does not invest your pension pot according to HMRC’s rules