Contribution Allowance

The annual Contribution Allowance will be £215,000, initially, increasing to £255,000 from 2010 and reviewed quinquennially thereafter.

Individuals may obtain tax relief on annual personal contributions up to the lower of the Contribution Allowance, and 100% of earnings.

Employers may obtain tax relief on pension contributions of up to the Contribution Allowance, per employee - regardless of earnings. (Such contributions would still need to be commercially justifiable).

Exceeding the allowance will bring a tax charge on the individual. This will also apply for Defined Benefit arrangements.