Firefighters 2006 scheme – Active
Tax on pension savings
HM Revenue and Customs impose two controls on the amount of pension savings you can make without having to pay extra tax. These controls are known as the Annual Allowance and Lifetime Allowance. This is in addition to any income tax you pay on your pension once it is in payment.
The Annual Allowance is the amount your pension savings can go up in any one tax year before you have to pay an extra tax charge on it.
You can read more about this in the LGA factsheet here.
The lifetime allowance is the total pension you can build up without being liable for a tax charge. If you go over the lifetime allowance you’ll pay tax on the excess, but only when you actually take your pension.
You can read more about Lifetime Allowance in the LGA factsheet here.