If you have not yet begun drawing money from your pension, you can contribute up to 100% of your earnings to your pension each year or up to the annual allowance of £40,000 (2021/22). This means the total sum of any personal contributions, employer contributions and government top up received, can’t exceed the £40,000 annual pension allowance.
Contributions that exceed your annual salary or the £40,000 allowance are subject to an annual allowance charge in line with income tax.
If you have an income of over £240,000, including pension contributions, your annual pension allowance may be reduced. Additional rate taxpayers are most affected as for every £2 of income over £150,000, their annual allowance decreases by £1. The maximum reduction is £36,000 meaning the minimum resulting annual allowance would be no lower than £4,000.
If you have already begun drawing a pension, the annual allowance for contributions under the money purchase annual allowance (MPAA), may be capped at £4,000. You can find out more about MPAA on the Money Advice Service website