Pension and ISA allowances
Pension allowances
|
Tax year |
2026/2027 |
2025/2026 |
|---|---|---|
|
Standard Annual Allowance |
£60,000 |
£60,000 |
|
Money Purchase Annual Allowance |
£10,000 |
£10,000 |
|
Tapered Annual Allowance |
Tapered annual allowance applies to those with ‘adjusted income’ of more than £260,000 and ‘threshold income’ of more than £200,000 |
Tapered annual allowance applies to those with ‘adjusted income’ of more than £260,000 and ‘threshold income’ of more than £200,000 |
|
Tax-Free Cash |
£268,275 |
£268,275 |
|
Lump Sum and Death Benefit Allowance (LSDBA) |
£1,073,100 |
£1,073,100 |
Glossary
Standard Annual Allowance: The annual allowance is a limit to the total amount of contributions that can be paid to defined contribution pension schemes and the total amount of benefits that your clients can build up in a defined benefit pension scheme each year, for tax relief purposes.
Money Purchase Annual Allowance: If your clients have flexibly accessed their benefits, the Money Purchase Annual Allowance (MPAA) is the amount that can be paid in one year to their money purchase arrangements without a tax charge applying.
Tapered Annual Allowance: For the taper to apply, the limits on threshold income and adjusted income must both be exceeded. This reduces your clients’ Annual Allowance by £1 for every £2 of adjusted income above £260,000 subject to a maximum reduction of £50,000. The minimum reduced allowance is £10,000. The level of adjusted income at which the maximum reduction in the annual allowance is reached is £360,000.
Tax-Free Cash: Tax-free cash is usually limited to the lower of 25% of total benefits or the available Lump Sum Allowance or Lump Sum & Death Benefit Allowance. This means usually a maximum tax-free cash amount of £268,275 can be received by pension savers during their lifetime.
The Lump Sum and Death Benefit Allowance (LSDBA) is a limit on the total amount of tax-free lump sums that can be paid from a pension, including both during the member's lifetime and upon their death before age 75, with a standard limit of £1,073,100.
ISA Allowances
|
Tax year |
2026/2027 |
2025/2026 |
|---|---|---|
|
ISA Allowance |
£20,000 |
£20,000 |
|
Junior ISA Allowance |
£9,000 |
£9,000 |
|
Lifetime ISA Allowance |
£4,000 |
£4,000 |
Glossary
ISA: Individual Savings Account that allows your clients to invest tax-efficiently, so they pay no UK tax on any income and capital gains they receive.
Capital Gains Tax Allowances
|
Tax year |
2026/2027 |
2025/2026 |
|---|---|---|
|
Individual Capital Gains Tax Allowance |
£3,000 |
£3,000 |
Glossary
Capital gains tax: The tax on the profit made from selling an asset that has increased in value.