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How much can I contribute into a pension?


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Understand your limits

Remember, personal pensions are a tax efficient way to save for retirement. For every £80 you pay in, HMRC pays in £20 to your pension and if you're a higher rate taxpayer you may be able to claim back additional tax relief through your tax return.

Annual Allowance

The annual allowance for most people is £40,000. From 5 April 2016 a new regulation will affect people with an 'adjusted income' of over £150,000 per annum. 'Adjusted income' includes your earnings, any rental income you receive, employer contributions to your pension and your pension contributions if your employer takes your contributions from your pay before it is taxed.

Under the new regulation, people with an ‘adjusted income' of over £150,000 per annum will have their annual allowance reduced by £1 for every £2 of income, up to a maximum reduction of £30,000. This means individuals with ‘adjusted income’ in excess of £210,000 will only have an annual allowance of £10,000.

If an individual’s ‘threshold income’ is less than £110,000, they will keep their £40,000 annual allowance. ‘Threshold income’ includes your earnings, any rental income you receive, interest and pension income.

If you've taken taxable withdrawals from your pension (with the exception of an annuity), you'll only have a £10,000 annual allowance.

Taking advantage of unused allowance

If you haven’t fully used your annual allowance from previous years, it’s possible to use unclaimed allowance from the previous three years using what is know as ‘carry forward’.

You will need to have earnings equal to, or greater than, the pension contribution you wish to make.

It’s important to understand the tax implications and consider all your pension options to avoid any unnecessary tax bills. Your NFU Mutual Financial Adviser* can help you review the retirement options available to you and make recommendations to suit your personal situation.

Lifetime Allowance

Your Lifetime Allowance is the maximum amount you can save into your total pension pot over your lifetime, without incurring tax penalties. From April 2016 the allowance is £1 million.

Top up your pension

Paying more into your pension could make a big difference to your retirement income. Whether you'd like to change your regular contribution or make a one-off payment, we are here to provide retirement planning advice. For example, you might have received a windfall such as a work bonus or inheritance that you could invest in your pension. If you are unsure about what pension contributions to make, your NFU Mutual Financial Adviser* can help you review your situation and make recommendations to suit your individual needs.

You should be aware that the value of your investment and any income from it may go down as well as up and you may get back less than invested.

The tax treatment of pensions depends on individual circumstance and may be subject to change.

Talk to the experts

Our Financial Advisers* can offer expert, personalised advice to help make saving for your retirement as easy and practical as possible.


*Please note:

When you contact us we'll explain the advice services we offer and our charges. NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers.

For security and training purposes, calls may be recorded and monitored.