For UK Financial Adviser only - not approved for use by retail customers. Visit our customer website.
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Annual Allowance Calculator

The Annual Allowance was first introduced in April 2006 with pensions simplification.
Since then it has undergone many changes and is now relatively complicated with many “quirks”:

  • We have had a straddling pension input period in 2011/12
  • Reductions in the allowance, first to £50,000 then £40,000
  • Changes to the default pension input period rules
  • From 2016/17 individuals may have their allowance reduced by up to £30,000 each tax year if they are subject to the annual allowance tapering rules. This will not affect the availability of carry forward from years where the taper was not in force, along with any carry forward from a tapered year.

To facilitate the introduction of the tapered Annual Allowance all pension input periods were aligned with the tax year in 2015/16, this was achieved by the introduction of transitional provisions.

You can find out about the operation of the Annual Allowance in our technical centre here:

The Government limits the amount that can be paid each year into your client's pension, before incurring a tax charge. This is called the Annual Allowance. If this is exceeded, your client may be liable to a tax charge and must inform HRMC through the completion of a tax return. The Annual Allowance limits are outlined below:

http://www.pruadviser.co.uk/content/knowledge/technical-centre/pension-facts-and-planning/

Our Annual Allowance calculator allows you to input the details of your client's existing and expected pension input amounts.

It then works out:

  • If your client could be subject to an Annual Allowance charge,
  • The amount of unused Annual Allowance including any carry forward

There is also a simple ‘adjusted income’ and ‘threshold income’ calculator to help you determine if your client will be subject to the tapered Annual Allowance and have a personal Annual Allowance of less than the current £40,000. This will calculate the taper per tax year. You also have the ability to enter an override to this on the summary page if you know what the taper figure will be.

Warning, once you have calculated the remaining AA for the member be aware that any further contributions may change the tapered calculation.

For instance if the employer is planning to contribute the remaining AA for a member, the contribution they can make will be roughly two thirds of the remaining AA that has been calculated.

Launch Annual Allowance Calculator

For help with estimating the pension input amounts for defined benefit arrangements you can use our Defined Benefit Pension Inputs tool.

Launch Defined Benefit Pension Input Amount Tool

For UK Adviser Use Only - Not Approved For Use With Clients