Annual Allowance

What action can I take?

If you have run through the calculator and your result was red or amber then you should consider making a change. Here are some potential solutions which could help you avoid a tax charge:

Excess unused allowance

1

If you have unused allowance from the 3 previous tax years you can exceed the limit in the current tax year.

Video explanation

Tell me my unused allowance

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No unused allowance

2

If you have no unused allowance you could reduce or stop employee contributions (check that this doesn't affect your entitlement to receive employer contributions)

Want to make a change?

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Opt for cash in lieu

3

If you are still over the limit on employer contributions alone, find out if your employer allows you to opt for cash in lieu of a reduced employer contribution. There will be a deduction to cover the additional cost of employer’s National Insurance but its generally better than paying the tax charge for exceeding the Annual Allowance.

Click here for explanation

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If all else fails...

4

You can pay in £4,000 each year without an Annual Allowance charge.

Still unsure…? We are here to help.

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pension.allowance@lemonadereward.com

Calculation results are only a guide and are not guaranteed, they should not be relied upon as a recommendation or advice that a particular course of action is suitable.

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