HMRC UK pension schemes rates and allowances for 2020-21
HMRC have updated their pensions schemes rates and allowances guidance to the annual allowance and money purchase annual allowance for 2020–21.
Standard lifetime allowance
Tax year & Allowance Amount
2020 to 2021 – £1,073,100
2019 to 2020 – £1,055,000
2018 to 2019 – £1,030,000
2017 to 2018 – £1,000,000
2016 to 2017 – £1,000,000
2015 to 2016 – £1,250,000
2014 to 2015 – £1,250,000
2013 to 2014 – £1,500,000
2012 to 2013 – £1,500,000
2011 to 2012 – £1,800,000
Member contributions
There’s no limit on the amount that an individual can contribute to a registered UK pension scheme. If you’re a UK resident aged under 75 you may receive tax relief on your contributions to registered pension schemes.
Tax relief is limited to relief on contributions up to the higher of:
* 100% of your UK taxable earnings
* £3,600
Annual allowance
Tax year & Allowance Amount
2020 to 2021 – £40,000
2019 to 2020 – £40,000
2018 to 2019 – £40,000
2017 to 2018 – £40,000
2016 to 2017 – £40,000
2015 to 2016 – 6 April 2015 to 8 July 2015 – £80,000
2015 to 2016 – 9 July 2015 to 5 April 2016 – £0
2014 to 2015 – £40,000
2013 to 2014 – £50,000
2012 to 2013 – £50,000
2011 to 2012 – £50,000
From 6 April 2016 your annual allowance will be reduced if your adjusted income for the tax year is more than the adjusted income limit.
Tax year – Threshold income limit – Adjusted income limit
2020 to 2021 – £200,000 – £240,000
2019 to 2020 – £110,000 – £150,000
2018 to 2019 – £110,000 – £150,000
2017 to 2018 – £110,000 – £150,000
2016 to 2017 – £110,000 – £150,000
Minimum reduced (or tapered) annual allowance
Tax year – Minimum tapered annual allowance
2020 to 2021 – £4,000
2019 to 2020 – £10,000
2018 to 2019 – £10,000
2017 to 2018 – £10,000
2016 to 2017 – £10,000
Any amount of pension savings over the annual allowance will be liable to the annual allowance charge.
Money purchase annual allowance
This applies where the scheme member has flexibly accessed any of their pension benefits and was introduced on 6 April 2015.
Tax year Amount
2020 to 2021 – £4,000
2019 to 2020 – £4,000
2018 to 2019 – £4,000
2017 to 2018 – £4,000
2016 to 2017 – £10,000
2015 to 2016 – 6 April 2015 to 8 July 2015 – £20,000
2015 to 2016 – 9 July 2015 to 5 April 2016 – £0
Alternative annual allowance
This applies to scheme members who have:
pension savings in both defined benefits and defined contribution arrangements
flexibly accessed their money purchase pension benefits and made money purchase pension savings in excess of the money purchase annual allowance
Tax year Amount
2020 to 2021 – £36,000 (the annual allowance, less the money purchase annual allowance, if the member’s annual allowance is reduced
2019 to 2020 – £36,000 (the annual allowance, less the money purchase annual allowance, if the member’s annual allowance is reduced)
2018 to 2019 – £36,000 (the annual allowance, less the money purchase annual allowance, if the member’s annual allowance is reduced)
2017 to 2018 – £36,000 (the annual allowance, less the money purchase annual allowance, if the member’s annual allowance is reduced)
2016 to 2017 – £30,000 (but this may be lower if the member’s annual allowance is reduced)
2015 to 2016 – 6 April 2015 to 8 July 2015 – £60,000
2015 to 2016 – 9 July 2015 to 5 April 2016 – £0
Tax charges on payments from registered pension schemes
Type of charge Rates
Lifetime allowance charge 55% – if the amount over the lifetime allowance is paid as a lump sum
25% – if the amount over the lifetime allowance is not taken as a lump sum
Annual allowance charge Marginal rate of Income Tax
Unauthorised payments charge 40%
Unauthorised payments surcharge 15%
Overseas transfer charge 25%
Short service refund lump sum charge 20% on first £20,000
50% on amount over £20,000
Special lump sum death benefits charge 45%
Authorised surplus payments charge 35%
Scheme sanction charge 15% to 40%