Annual Allowance and Lifetime Allowance
The Annual Allowance is the amount that an individual may contribute in a tax-efficient way to their pension savings over a 12-month period. This amount is adjusted by HMRC and in 2020 was £40,000.
The Lifetime Allowance is the tax-free limit on an individual’s total value of pension savings from all sources and is also adjusted by the Government through HMRC. In 2020 this amount was £1.073 million. It is up to individuals to check that their pension savings do not exceed this amount.
See also Factsheet 3 Your Retirement Benefits.