Member Contributions

There is no limit on the amount that an individual can contribute to a registered pension scheme. If you are a UK resident aged under 75 you may receive tax relief on your contributions to a registered pension scheme.

Tax relief is limited to relief on contributions up to the higher of 100% of your UK taxable earnings, and £3,600.  Only current earnings count for the 100% limit. It is no longer possible to use prior year earnings or to carryback contributions to earlier years.

Any amount of contributions paid over the annual allowance will be liable to the annual allowance charge.

	2007/08	2008/09	2009/10	2010/11
Annual Allowance	£ 225,000	£ 235,000	£ 245,000	£ 255,000
Lifetime Allowance	£ 1,600,000	£ 1,650,000	£ 1,750,000	£1,800,000

Tax Charges on Payments from Registered Pension Schemes

There are a number of special tax charges that apply to special payments made from registered pension schemes. These are listed below.

Charges	Rates
Lifetime allowance charge	55% if the amount over the lifetime allowance is paid as a lump sum
Lifetime allowance charge	25% if the amount over the lifetime allowance is not taken as a lump sum
Annual allowance charge	40%
Unauthorised payments charge	40%
Unauthorised payments surcharge	15%
Short service refund lump sum charge	20% on first £10,800, 40% on amounts over £10,800
Special lump sum death benefits charge	35%
Authorised surplus payments charge	35%
Scheme sanction charge	15% - 40%

Pension Contributions

Most pension contributions are paid net of basic rate tax. Payments will rise from 78% of gross premium to 80% from 6 April 2008.

State Pension

Basic state pension:		2009/10	2008/09
Single person:
Weekly		£95.25	£90.70
Four weekly		£381.00	£362.80
Annual		£4,953.00	£4,716.40
Married Couple:
Weekly		£152.30	£145.05
Four weekly		£609.20	£580.20
Annual		£7,919.60	£7,542.60
Winter fuel allowance - over 60s (non taxable)		£250	£200
Winter fuel allowance - over 80s (non taxable)		£400	£300
One off payment:
Over 60s household		£50	£50
Over 80s household		£100	£100
Lump sum deferred benefit option (see note)
Single person:
One year		£4,800	£5,000
Three years		£16,100	£16,800
Five years		£29,800	£31,000
Married couple:		7,700	8,000
One year		£7,700	£8,000
Three years		£25,800	£26,800
Five years		£47,600	£49,500

Note

The above examples are approximate and assume an annual increase in state pension of 3.5% and an interest rate of 7%.