What about tax?

You make contributions to USS which are tax-free. These contributions are used to build up your pension savings. The Annual Allowance (AA) is the maximum amount of pension savings you can build up each year before you get a tax charge.

The standard AA is currently £60,000 per tax year. If you build pension savings over this you may incur a tax charge. Find out more on the AA.

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

If you’re 55* or over, you can start taking your Investment Builder savings (or any other defined contribution pot you may have) flexibly.

* The government has announced they’ll raise this to age 57 in 2028 for certain members. Depending on where you are in your retirement journey, this could impact how early you can access your USS benefits.

HMRC introduced a limit to stop these savings from being taken out and then repaid into another pension scheme for extra tax relief. This limit is known as the Money Purchase Annual Allowance (MPAA).

The MPAA limits how much you can pay into a defined contribution arrangement before you need to pay tax. The limit is currently £10,000 per year.

Find out the ins and outs of the MPAA.

The Lump Sum Allowance (LSA) is the limit on the total amount of certain tax-free lump sums that you will be able to receive before marginal rate taxation applies. The limit is £268,275 but may be higher if you have a Lifetime Allowance (LTA) protection. These are known as relevant lump sums.

Find out what you need to know about the LSA.

The Lump Sum and Death Benefit Allowance (LSDBA) is the limit on the total amount of tax-free lump sums that can be paid in respect of an individual before marginal rate taxation applies. This includes any relevant lump sums used under your LSA, plus any benefits paid to you as a serious ill health lump sum before age 75 and any tax-free lump sum death benefits payable in the event of your death before age 75. The limit is £1,073,100 but may be higher if you have a Lifetime Allowance (LTA) protection.