Tax limits on my pension.

The Scheme is registered with HMRC, which means you receive certain tax advantages in exchange for limits on the amount of pension you can build up without paying a tax charge. These limits only affect a few members who have built up large amounts of pension benefits in the Scheme and elsewhere, but it’s useful to be aware of these limits.

Lifetime Allowance (LTA)

The LTA is the maximum value of pension and other retirement benefits (excluding any State Pension) which you can build up over your lifetime before you have to pay an additional tax charge.

The LTA limit is currently £1,073,100.

You can find out more about the LTA on the MoneyHelper website.

Annual Allowance (AA)

You can receive tax relief on pension savings (excluding the State Pension) that are built up in each tax year up to a limit known as the Annual Allowance. If you contribute more or your pension builds up faster than the AA allows, you’ll have to pay a tax charge.

The AA doesn’t apply to your pension in the M&S Pension Scheme as you can no longer build up extra benefits in the Scheme, but you may want to know more about it when thinking about building up pension savings elsewhere. You can find out more about the Annual Allowance on the MoneyHelper website.

What happens if I exceed any of these allowances?

Most members are unlikely to exceed these allowances. However, if you think you might be affected you should think about:

  • Contacting the Pensions Administration Team to find out how your current level of benefits in the Scheme compares to the LTA
  • Speaking to an Independent Financial Adviser; and/or
  • Visiting the MoneyHelper website for more information on any protection that may be available.