Non-State Pension Saving Limits

There is no limit to the amount of money that you can save for your retirement. If you choose to contribute to several non-state pension schemes (see Non-State Pensions), pay National Insurance contributions to qualify for the state pension (see National Insurance Contributions) and have a savings account, an ISA, and money invested in property (see Other Investment Opportunities), you will not be penalised. It is your right to save your money if you choose to do so. There are also tax incentives for saving; you may not be required to pay any tax on money you are saving for retirement. However, these tax incentives are limited, and if your pension savings or on retirement your pension fund exceed these limits, your savings will be subject to taxation. There are limits on the amount of tax relief you are entitled to, the amount you can save tax-free for retirement each year and the amount you can save tax-free for retirement over your lifetime. For more details see Tax Incentives for Saving.

You are only limited in regard to your non-state retirement savings; your state pension is determined by the National Insurance contributions that you make and there is no way to make additional contributions to your state pension. Only if you start earning more money will your contributions be accordingly increased. Your state pension does not count towards any pension savings limits, only your non-state retirement savings could be affected. In practice, only a very small percentage of the population will be affected by these limits; there is no general attempt to penalise people for saving for their retirement.

For more information on saving limits see Tax relief limits for pension savings, Annual limit for pension savings and Lifetime Limit for pension savings.