From 6 April 2011, the annual allowance for tax-relieved pension savings reduced from £255,000 to £50,000. You will not be affected by this change, regardless of level of income, if you are:
•self-employed and contribute less than £50,000 a year into your personal pension scheme(s)
•a member of a 'money purchase' workplace pension scheme and the total contributions made by you and your employer together with any contributions you may make to other pension arrangements (such as Additional Voluntary Contributions (AVCs) or private pensions) is less than £50,000
•a member of defined benefits scheme (for example, a final salary or career average scheme) and your pension savings are less than £50,000 a year
•not an active member of any registered pension scheme
To decide whether you are affected and if so, to what extent, you need to work out how much your pension savings are for a tax year. If they are more than £50,000 then you may be affected if your pension savings are regularly at this level. For 'money purchase' schemes, pension savings are the amount of cash paid in to your scheme for the tax year (including employer contributions for workplace schemes). The rules for working out pension savings for other types of scheme are more complicated - find out more by following the link below.
If your pension savings are normally much less than £50,000 in a year but are higher in one year, for example because you make a large one-off contribution or you are in a final salary scheme and you get a large pay rise, then you may be able to carry forward unused allowances from previous years.