What about tax?

The AA is the maximum amount of pension savings you can build up in a year (inside and outside of USS) before you get a tax charge. The standard AA is £40,000 – but this could be lower if you have a higher income.

Find out more on the AA.

For more information on how to manage your AA, take a look at Voluntary Salary Cap (VSC) and Scheme Pays.

If you’ve taken benefits from a defined contribution scheme (like the Investment Builder), any contributions you then make to any defined contribution scheme in the future are limited to the MPAA before you’re taxed.

The limit is £4,000 a year – this includes any contributions from your employer.

Find out the ins and outs of the MPAA.

The LTA is the limit on what you can take from your pension savings (including a cash lump sum and/or an income) before you’re charged tax. If you’ve paid any additional contributions, they’ll also count towards your LTA.

The LTA limit for the 2020/2021 tax year is £1,073,100.

There are a few ways you can manage the tax you’ll need to pay if you’ve gone over your LTA. This includes using Enhanced Opt Out (EOO) or a Voluntary Salary Cap (VSC).

Find out what you need to know about the LTA.