Pension news

Are you affected by the 2017/18 Annual Allowance tax charge?

21 September 2018

Annually we contact members who may have exceeded the Annual Allowance. If this applies to your personal circumstances you will need to determine if you are subject to the Annual Allowance charge based on your pension savings in the Plan, but also on any other pension arrangements that you may have.

Read on to find out more about the Annual Allowance, the charge and how the Plan can assist you.

What is the Annual Allowance?

The Annual Allowance is the maximum Pension Input Amount that can be paid each year to all of your pension arrangements without incurring a tax charge. The standard Annual Allowance for the 2017/18 tax year was £40,000.

How do I know if I have an Annual Allowance charge?
If you are likely to have exceeded the Annual Allowance then you will have received, or will shortly be receiving, a personalised pension savings statement and supporting guide in the post to help you work out if you have an Annual Allowance charge to pay. 

Your statement will tell you your Pension Input Amount for the year in respect of your benefits in the Plan. It’s important to note that if you have pension savings in other pension arrangements then you will need to include these when working out your total Pension Input Amount for 2017/18.

Next steps
You should read your pension savings statement and guide carefully to establish if you have an Annual Allowance charge (this will vary depending on your personal circumstances) and review your options for paying the charge if required. The Annual Allowance webpage provides further details of the Annual Allowance, example calculations and how to go about paying a charge if you need to.

You must also make sure that you are aware of the following dates to ensure timely payment of the charge:


Deadline date

Consider whether you want to seek independent financial advice

As soon as possible

Register for a self-assessment tax return, if you did not send one last year and have an Annual Allowance tax charge

By 5 October 2018

Request a Scheme Pays quote. You will then receive a Scheme Pays quote by 21 November 2018

By 24 October 2018

Return a Scheme Pays application form

By 20 December 2018

Notify HMRC of the tax charge (if one applies to you)

By 31 January 2019
Getting help
We have appointed WEALTH at work to operate a free dedicated telephone helpline to answer any questions you may have about your Annual Allowance. The helpline can help you understand and work out what your tax liability is based on your own personal circumstances and, they can also offer advice around Annual Allowance as part of your retirement plans if you have more complicated financial needs. Call 0800 0931462 to speak to a member of the WEALTH at work guidance team.

If you are concerned about how tax may affect your pension benefits, you can use the Money Advice Service to find an independent financial adviser in your area.

The Pensions Team is unable to provide you with financial advice, however, if you have any queries please use the Contact us page to get in touch.