JavaScript Warning

This site relies on JavaScript for critical functionality. Please enable JavaScript and reload the page.

How much can I pay into a pension each year?

There is no maximum amount you can pay into a SIPP or other type of pension, but there is a limit to the pension contributions that attract tax relief. For most people this is either 100% of their taxable earnings or £40,000 each tax year, whichever is lower.

If you do not have any taxable earnings, you or a relative or friend can still pay up to £2,880 into your SIPP each tax year. Tax relief will boost this to £3,600.

The annual allowance of £40,000 goes down to £4,000 once you have made a taxable withdrawal from your pension. It is then called the money purchase annual allowance.

You may also need to think about the lifetime allowance, which applies to the total value of all your pension schemes. If all your pensions are worth more than the lifetime allowance, you may have to pay tax on the excess. The lifetime allowance is adjusted each year in line with inflation. For the tax year of 2019/20 the lifetime allowance is £1,055,000.

Rates of tax relief may be different for people who live in Scotland.