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've been working to make sure members who need an RPSS and PSS receive them as soon as possible. We're sincerely sorry to say it's taking longer than we planned. All Public Service Pension Schemes are facing similar challenges around timings. We're speaking with them regularly to make sure shared guidance is available for affected members.
Members who are expecting a PSS for the tax year 2023/24, who have not already received an RPSS, will start to receive these from February 2025.
As this is after the deadline for Self Assessment tax returns, we've worked with HMRC to agree guidance.
HMRC have confirmed you must complete your Self Assessment as normal using a provisional figure by the 31 January 2025 deadline. This is a figure calculated to the best of your ability.
There will not be a financial penalty from HMRC if the provisional figure you use is incorrect if you’ve tried to calculate it to the best of your ability and kept records of the calculation. Even if the figure needs to be changed, you’ll not receive a late-filing penalty.
Read guidance on how to estimate a provisional tax charge.
When you receive your PSS, you must update your return with the actual figure within one year of the 31 January 2025 deadline.
If the actual figure is higher than the provisional figure you provided and you’ve paid the tax charge yourself rather than using Scheme Pays, HMRC will apply interest due on the difference.
If you only complete a Self Assessment because of your pension tax liability and you'll not incur an Annual Allowance charge for 2023-24, you must tell HMRC you no longer need to submit a Self Assessment return.
There should not be a penalty but interest may be charged if you:
- have reasonable grounds to think you've not breached the £60,000 standard Annual Allowance amount
- do not submit a Self Assessment tax return by the 31 January 2025 deadline
- have an Annual Allowance charge when you receive your delayed PSS for year 2023-24
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.