How much can I contribute to my pension each year after I have made a withdrawal?

I have started drawing my pension but with the new pension freedom rules I can see me wanting to top it up now and again as I still have other excess income which I need to put somewhere. Is it possible to top-up my pension and if so by how much each year?

Question asked by Jeremy Wild
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Answered by Neil Adams

If you have ‘flexibly accessed’ your pension benefits already you are subject to a new £4,000 annual cap on your pension contributions. This is known as the money purchase annual allowance and is designed to prevent ‘pension recycling’.

However, for those who have accessed their pensions through an old branch of income drawdown, known as capped drawdown, they can still put the full £40,000 annual allowance into their pension in any given tax year providing they do not breach the previously agreed cap.

pension flexible access
 
income drawdown
 
pension withdrawal
 
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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