Annual allowance
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Annual allowance
The annual allowance is the limit on the amount your pension can grow each tax year without incurring a tax charge. This includes your pension from the Plan and any other private pensions you may have.
The annual allowance for the 2025/2026 tax year is £60,000.
If the difference between the capital value of your pension and tax-free cash at the start of the year exceeds the value at the end of the tax year by more than the annual allowance, the excess would be subject to a tax charge.
For information on how to calculate this, visit the HMRC website.