The Annual Allowance
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The Annual Allowance (AA) is the amount by which the value of your pension benefits may increase in a year without you having to pay a tax charge. If the value of your pension savings in a year (including pension savings outside of the LGPS) is more than the annual allowance, the excess will be taxed as income.
The standard annual allowance has increased to £60,000 from 6 April 2023. For the tax years 2016/17 to 2022/23 it was £40,000. The annual allowance for some members will be lower than the standard annual allowance.
You can find more information about when a different annual allowance will apply in our factsheet.