Annual Allowance

The Annual Allowance (AA) set by HM Revenue & Customs is the maximum amount of pension savings you can build up tax-free in any year (which is called the Pension Input Period) which benefits from tax relief. The Pension Input Period (PIP) for the Xerox Pension Schemes is 6th April to 5th April.

The AA is set at £40,000 from the tax year beginning April 2016. Annual pension savings up to the AA receive tax relief at the member's highest rate of tax. Annual pension savings above the AA will be taxed at the member's highest rate of tax through their self-assessment tax return.

However, if your adjusted income is more than £150,000 a year, you will have an AA of less than £40,000. If your threshold income is less than £110,000 a year, you will still have an AA of £40,000, even if your adjusted income is more than £150,000.

More information on these limits can be found in the leaflet Annual Allowance & Lifetime Allowance – Impact of changes from April 2016click here to view and/or print a copy.