General Information
Annual Allowance
There is no limit on the amount of contributions that can be paid. However, there is a limit on the amount which enjoys tax relief. The annual limit is £3,600 or 100% of earnings* (capped at the Annual Allowance), whichever is greater. Any contribution over the Annual Allowance will be subject to a tax charge. There is no limit at all in the year in which benefits are taken in full.
* There are restrictions to this within the IBM pension plans; however, it is possible to contribute additional amounts, up to the maximum, through other pension arrangements.
If you require details of the Annual Allowance and the amount you have used in the last tax year for your tax return, please email Pensions Services for details.
For defined benefit schemes, the total amount of pension accrued in a year is limited to the Annual Allowance.
For defined contribution schemes, the amount of contributions (including contributions paid on your behalf e.g. IBM contributions) in a year is limited to the Annual Allowance.
The Annual Allowance is £255,000 in the 2010/11 tax year. The following table shows the Annual Allowance for past and future tax years.
| Tax Year | Annual Allowance |
| 2006/07 | £215,000 |
| 2007/08 | £225,000 |
| 2008/09 | £235,000 |
| 2009/10 | £245,000 |
| 2010/11 to 2015/16 | £255,000 |
Last Updated: 29/06/2010
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