The new 2013/14 pension contribution rules can be a source of confusion.

Speaking to a financial adviser for pensions advice without them trying to sell you a new pension is damn near impossible. It is not always easy to work out what you can and cannot do, or perhaps more importantly what you should and should not do with your pensions.

Here is a quick run down of the latest pension rules:

  • You can invest up to £50,000 each tax year into a pension subject to your own level of earnings.
  • You can actually invest up to £200,000 each tax year into a pension.
  • That is because you can use up any unused allowance from the previous three tax years which all now have an effective allowance of £50,000 each.
  • You do need to have been a member of a pension scheme for each of those years in order to use them, and of course your contribution allowance cannot exceed your earnings.
  • You will receive tax relief at your highest income tax rate. So a 20% tax payer will get a 20% tax rebate on any contributions made to a pension. A 40% or 50% tax payer will receive a tax rebate of 40% or 50% of contributions made to a pension.
  • Your tax rebate is subject to the amount of tax paid.
  • The first 20% of the tax rebate is paid directly into your pension. The remaining rebate, if applicable can be claimed via your tax return.
  • You can pay in up to £3,600 into a pension even if you have no earnings at all.

For information and advice on your own personal situation please click on the link below.

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Blog by Jaskarn Pawar

Jaskarn Pawar is an experienced and award winning Chartered and Certified Financial Planner. He advises people all over the UK on financial planning and wealth management issues to help them reach solutions to fit their personal needs. You can contact Jaskarn on 01604 211234 or by e-mail on