Your private pension contributions are tax-free up to certain limits.
This applies to most private pension schemes, for example:
- workplace pensions
- personal and stakeholder pensions
- overseas pension schemes that qualify for UK tax relief - ask your provider if it is a ‘qualifying overseas pension scheme’
You pay tax when you take money out of a pension (external link) .
Limits to your tax-free contributions
You usually pay tax if savings in your pension pots go above:
- 100% of your earnings in a year - this is the limit on tax relief you get (external link)
- £40,000 a year - check your ‘annual allowance (external link)'
- £1,055,000 in your lifetime - this is the lifetime allowance (external link)
You also pay tax on contributions if your pension provider:
- is not registered for tax relief with HM Revenue and Customs (HMRC)
- does not invest your pension pot according to HMRC’s rules