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The annual allowance in relation to registered pension schemes is the maximum amount:

1. •

   by which a member’s benefits can increase in a pension input period (PIP) (in respect of defined benefit schemes)

2. •

   that can be contributed to pension arrangements in a PIP (for defined contribution or money purchase schemes)

Without risk of the member suffering a tax charge on this increase in a member’s benefits / amounts contributed.

The increase in a member’s benefits / amounts contributed are known as the Pension Input Amount (PIA). Since 6 April 2016 the PIA has been measured on a tax year basis ― in other words, each PIP ends on a 5 April. The PIA covers all contributions whether made by the member or any other person, eg the member’s employer.

If the annual allowance is exceeded in a tax year, the individual is at risk of suffering a tax charge (the annual allowance charge) unless the carry