Annual Allowance is the maximum amount of pension growth a person can have before it’s subject to a charge.
This includes pension savings that 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
You’ll be sent an Annual Allowance pension savings statement 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
We cannot provide an Annual Allowance statement for member’s who’ve been rolled back for the tax years:
- 2015/16 to 2020/21
- 2022/23
If you're affected by the changes to public service pension schemes, your service between 1 April 2015 and 31 March 2022 will be placed into your legacy scheme from October 2023 as part of the public service pension scheme's remedy.
Some or all of your service for the remedy period 1 April 2015 to 31 March 2022 will be moved back into the 1995 or 2008 Section from the 2015 Scheme.
This may impact the tax treatment of your pension benefits over one or more of the tax years in the remedy period.
We'll send you a remediable service pension saving statement for the tax years in the remedy period.
You'll receive one updated statement that will include:
- your recalculated pension input amount for the remedy period tax years
- confirmation of the pension input amounts for the 3 tax years before from 2012 to 2015
You'll receive this by October 2024.
Read more information about the remedy on our website.
HMRC are launching a new Digital Service to rectify Annual Allowance charges for the remedy period tax years and 2022/23 tax year.