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ACCA Strategic Professional · Advanced Taxation (UK) · Statutory obligations, time limits and the implications of non-compliance

For the tax year 2025/26, what is the standard annual allowance for registered pension schemes, and what is the maximum pension contribution that can qualify for tax relief by an individual with no earnings?

The annual allowance for 2025/26 is £60,000, and a person with no earnings can have tax relief on contributions of up to £3,600. The £40,000 figure applied only to 2022/23, and £10,000 is the minimum allowance after tapering.

  1. A£40,000 annual allowance; £3,600 maximum contribution with no earnings
  2. B£60,000 annual allowance; £3,600 maximum contribution with no earningsCorrect
  3. C£60,000 annual allowance; £10,000 maximum contribution with no earnings
  4. D£40,000 annual allowance; £12,570 maximum contribution with no earnings

Explanation

For 2023/24 to 2025/26 the annual allowance is £60,000. An individual with no earnings can obtain tax relief on contributions up to £3,600. The £40,000 figure applied to 2022/23, and £10,000 is the minimum tapered allowance, not a contribution limit.

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