Pensions

Lifetime and annual allowances, tax charges on payments from registered pension schemes

Standard lifetime allowance

Tax year	Amount
2012/13	£1,500,000
2011/12	£1,800,000
2010/11	£1,800,000

Annual allowance

Tax year	Amount
2012/13	£50,000
2011/12	£50,000
2010/11	£255,000

The amount of tax relived contributions to a registered pensions scheme for a tax year is limited at the higher of £3,600 and 100% of earnings.

Where the increase in pension scheme value in the tax year is in excess of the annual allowance, the excess is subject to the annual allowance charge.

To the extent that the annual allowance is unused in any of the three previous tax years, it can be added to the current year's allowance. For years before 2011/12, allowances can only be carried forward if the amount used is less than £50,000. The amount carried forward is the balance to £50,000. The current year's allowance is used first, then brought forward allowances, with an earlier year's unsued allowances being used before a later year.

Tax charges on payments from registered pension schemes

2010/11 onwards

Charge	Rate
Lifetime allowance charge	55% if amount in excess of lifetime allowance is taken as a lump sum 25% if the amount over the lifetime allowance is not taken as a lump sum
Annual allowance charge	40%
Unauthorised payments charge	40%
Unauthorised payments surcharge	15%
Short service refund lump sum charge	20% on first £20,000 40% over £20,000
Special lump sum death benefits charge	35%
Authorised surplus payments charge	35%
Scheme sanction charges	15% to 40%

Special annual allowance charge

The special annual allowance charge applies for 2009/10 and 2010/11 only.

The charge applies to those with incomes of £130,000 or more (£150,000 or more before 9 December 2009) who increase their regular pension savings and whose total pension savings in the tax year are more than £20,000.

The charge, on the excess over the higher of their regular pension savings and £20,000 is taxed at 20%