Your private pension contributions are tax-free up to certain limits.
Private pension schemes include:
- workplace pensions
- personal or stakeholder pensions
- overseas pension schemes that qualify for UK tax relief
Limits to your tax-free contributions
You usually pay tax on private pension savings above:
- 100% of your annual earnings - this is the limit on tax relief you get
- £40,000 a year - this is the annual allowance
- £1.25 million in your lifetime - this is the lifetime allowance
You may also have to pay tax if your pension provider doesn’t invest your pension savings according to rules set by HM Revenue and Customs (HMRC).