Annual Allowance is the maximum amount of pension growth a person can have before it’s subject to a charge.
This includes pension savings the person makes themselves plus any made on their behalf by a third-party.
The Annual Allowance applies to pension benefits across all registered pension schemes.
The Annual Allowance limit for 2022/2023 is £40,000.
The Annual Allowance limit for 2023/2024 is £60,000.
View previous Annual Allowance limits on our website.
If you exceed the Annual Allowance limit, you may have to pay an Annual Allowance charge to HM Revenue and Customs (HMRC).
If you have any unused Annual Allowance from the previous 3 tax years, you may be able to 'carry forward' this amount and add it to the Annual Allowance in the current tax year. This could prevent or reduce the amount of Annual Allowance charge liability you have for the current tax year.
The unused Annual Allowance for the previous tax year is the difference between the total pension input amount for that year and the Annual Allowance in that tax year.
Annual Allowance Pension Savings Statement (PSS)
You’ll be sent an Annual Allowance PSS if the total pension growth across NHS Pension Schemes is more than the Annual Allowance.
HMRC's deadline for us to send statements to members is 6 October following the end of the tax year.
We’re only able to calculate your pension growth if we receive the annual update of pensionable pay and service from your employer. If your employer sends this annual update after 5 July, we’ll send you a statement within 3 months of receiving the annual update.
You can request a statement if you’ve not exceeded the Annual Allowance, this is known as an ‘On Demand’ statement.
If you ask for an ‘On Demand’ statement before 6 July, we have until 6 October or 3 months after the request is received to send you a statement. This is provided all the information needed to calculate the Annual Allowance is available.
Your statement is calculated on information provided by your employing authority (EA).
If you think your statement is incorrect, contact your EA to check the annual update they’ve sent is correct.
A third-party can request a statement to be sent to you if they have a valid letter of authority (LOA).
View an example of a statement in the pensions saving guide.
Members affected by rollback
For members affected by the Public Service Pensions Remedy, we cannot send you a 2023/24 PSS until we've sent you a Remediable Pension Savings Statement (RPSS).
We’ll start to send 2023/24 PSS in November 2024 for members who’ve received an RPSS and exceed the standard Annual Allowance.
Guidance on how to use provisional figures to complete the 2023/24 Self Assessment can be found in the HMRC Self Assessment Manual.
Read information about the HMRC Digital Service where you can rectify Annual Allowance charges for the remedy period tax years and 2022/23 tax year.
You'll have 3 months from the date you receive your RPSS to use the HMRC Digital Service and submit your information.