Any DC savings into the Citigroup Global Markets Ltd Pension & Life Assurance Scheme will get really useful tax breaks that are available to help you save as much as possible, in a way that’s tax-efficient.

But there are limits in place - and if you exceed them, you could be liable for a tax charge.

  • There are three types of allowance that you should be aware of:

1. The Annual Allowance

This is the maximum you can pay into all your pension plans over a tax year (across all of your UK pension schemes) and receive tax relief on. If you pay in more than the Annual Allowance, there could be a tax charge.

There are two versions of this allowance:

  1. If your income is less than £260,000, the Annual Allowance is currently £40,000. It’s set by the Government at the beginning of each tax year. Your ‘income’ refers to your salary, but also to things like property rental income and dividends.
  2. If your total taxable earnings, plus the total value of your pension savings, is more than £260,000, the Tapered Annual Allowance will apply to you. See below for how Citi helps you with this.
    • For every £2 of your earnings above £260,000, the Annual Allowance will decrease by £1.
    • If your income is £360,000 or more in a year, your Annual Allowance will be £10,000.

Remember: ‘Earnings’ means all of your income, not just what Citi pays you – it includes things like rental income and investment dividends.

 

2. The Lifetime Allowance

The Lifetime Allowance is the highest amount you can have in your overall pension savings, including lump sum benefits payable from Citi on your death, without paying an extra tax charge when you retire or die. It was previously set at £1.073 million.

However, following the Chancellor’s 2023 Spring Budget, the Lifetime Allowance Tax Charge has been reduced to £0 for 2023/24 and the Lifetime Allowance itself is due to be abolished from April 2024. This means you will no longer have any limits on how much you can save towards your pension savings.

3. The Money Purchase Annual Allowance (MPAA)

If you’ve already taken pension benefits from any of your pension plans, either as a cash lump sum or as income drawdown, your Annual Allowance will reduce to £10,000 a year, no matter how much your income is.

How much will be enough?

How will you be spending your money in retirement? Think about how your expenses might change, and what you'll still need to cover.

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Your options

How will you be spending your money in retirement? Think about how your expenses might change, and what you'll still need to cover.

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Avoiding Scams

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Looking after your loved ones

Make sure your loved ones are covered if anything happens to you.

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