Have you received an Annual Allowance / Pension Savings Statement from us?

 

What is the Annual Allowance?

The Annual Allowance (AA) is the total amount of pension savings you can make each year before incurring a tax charge.  The current standard limit is £40,000. The annual allowance applies across all of the pension schemes you belong to, it’s not a ‘per scheme’ limit and includes all of the pension contributions that you or your employer pay or anyone else who pays on your behalf.

If you exceed the annual allowance in a year, you won't receive tax relief on any contributions you paid that exceed the limit and you may need to pay an annual allowance charge. You may bring forward any unused annual allowances from the previous three tax years, to either reduce your annual allowance charge to a lower amount or reduce the annual allowance charge completely. 

 

Where to find help regarding your Annual Allowance?

You may have recently received a letter from Local Pensions Partnership Administration (LPPA) regarding your Annual Allowance and Pension Savings Statement - this can be a lot of information to take in.  To help you, we have provided information and some useful links to websites below.

HM Revenue & Customs website - you can find more information about the Annual Allowance and whether there’s an Annual Allowance charge for you to pay by visiting the HM Revenue & Customs (HMRC) website: www.gov.uk/tax-on-your-private-pension/annual-allowance. 

Tapered Annual Allowance - If your income exceeds £110,000 you may be subject to the Tapered Annual Allowance.  Click on the following HMRC weblink to work out if this applies to you: www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance.

The Pensions Advisory Service (TPAS) – comes under the Department for Work & Pensions and its aim is to make pensions accessible and understandable for everyone. They provide independent and impartial information and guidance about pensions, free of charge, to members of the public. To find out more, go to www.pensionsadvisoryservice.org.uk

Need Independent Advice - it is recommended that you speak to an independent financial or tax advisor.  If you don’t have an advisor, you could try www.unbiased.co.uk - please note that LPPA has no connection with Unbiased.co.uk.

As your Pension Administrator LPPA Cannot Give You Advice

Unfortunately, LPPA cannot offer any form of financial or tax advice to you and we cannot answer questions which relate to any pension scheme you may have with other pension providers.

We can only help you regarding your Annual Allowance if:

  • You have a specific query about the pay information quoted in your Annual Allowance / Pension Savings Statement we sent you.
  • You have not received your Annual Allowance by 6th October 2020 and you believe you have exceeded the Annual Allowance.
  • You wish to receive details regarding Scheme Pays (this can be requested via email to askpensions@localpensionspartnership.org.uk).

 

Your Annual Allowance / Pension Saving Statement

Her Majesty’s Revenue and Customs (HMRC) impose controls on the amount of pension savings you can make without having to pay additional tax, this is known as the Annual Allowance (or AA for short) limit.

This is in addition to any income tax you pay on your pension once you are receiving it.

Each year if you have, or are close to exceeding the set limit, you will receive an Annual Allowance letter and your Pension Savings Statement by the 6th October.

The Annual Allowance impacts all pensions you have or are paying into. The rules surrounding tax and your pensions are complex. You may want to consider financial advice to help look at your individual tax position.

Local Pensions Partnership Administration (LPPA) deal with the administration of your pension but are unable to offer tax advice as we are not regulated to do so.

There are free resources to help and these are detailed in the help section below.

We would ask that you only contact LPPA via telephone or email if you:

  1. Have a query about the pay information used to produce your annual allowance / pension savings statement.
  2. Have not received your letter by 6th October and you believe you have exceeded the Annual Allowance.
  3. Wish to receive details regarding scheme pays (this can be done via email to askpensions@localpensionspartnership.org.uk).

Our Helpdesk colleagues will be unable to assist with any additional queries relating to your annual statement or tax position.

 

For more information about the Annual Allowance see the Common Questions below.