There is a limit to how much you can save into your total pension pot free-of-tax called the lifetime allowance. This was reduced to just £1million in April 2016.
At first glance, this headline figure seems substantial, but as an example, a doctor on the 1995 NHS pension scheme will hit this limit with a pension of around £43K per year.
The allowance affects both your NHS and private pensions but as an added complication, both types of pension are valued very differently in terms of calculating your total savings.
Any excess pension savings above the lifetime allowance can be taxed at up to 55 per cent so it is an important consideration.
Will you breach the limit? For more information, please contact one of our advisers on 020 7252 5765.
Tax treatment varies according to individual circumstances and is subject to change.
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.