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Budget 2008
Registered Pension Schemes
| Tax Year | Annual allowance* | Lifetime allowance |
| £ | £ | |
| 2007/2008 | 225,000 | 1,600,000 |
| 2008/2009 | 235,000 | 1,650,000 |
| 2009/2010 | 245,000 | 1,750,000 |
| 2010/2011 | 255,000 | 1,800,000 |
Thereafter reviewed every five years
Annual allowance
- Personal contributions to all registered pension schemes.
- Tax relief on the lower of 100%of annual earnings† or the annual allowance.
Employer contributions
- Unlimited.
- Contributions in excess of annual allowance charged to tax at 40% on the member.
Measurement
- Measured against pension contributions:
- defined as total contributions to money purchase plans, plus annual increase in defined benefit rights
- annual increase in defined benefit rights valued at £10 for every£1 pension
- includes additional voluntary contributions to money purchase schemes
- excludes contracted-out rebates
- excludes additional voluntary contributions to buy added years.
- None in year all pension benefits are taken or in year of death.
Lifetime allowance
- Based on value of benefits taken at crystallisation.
- Scheme funds in excess of the lifetime allowance subject to a charge when benefits paid out:
- 55%if excess funds are taken as cash.
- 25%, plus income tax at marginal rates, if taken as income.
- Includes the value of contracted-out rights.
- Defined benefits rights valued at £20 for every £1 pension.
- Pensions in payment at 6 April 2006 valued at £25 for every £1 pension.
- Pension fund withdrawal in payment at 6 April 2006 based on maximum income available at last review date valued at £25 for every £1 pension.
* Total of personal and employer contributions.
† If no earnings, £3,600 a year and for relief at source arrangements only.