Pensions remain one of the most tax-efficient ways to save for the long term, offering benefits for both individuals and business owners. However, tax issues often arise when contributions are made without fully understanding the relevant rules. Most unexpected tax charges stem from a small number of key factors, including the annual allowance, tapered allowance for higher earners, the money purchase annual allowance, and missed carry-forward opportunities. For the 2025/26 tax year, the standard annual allowance is £60,000, though it may be reduced to as little as £10,000 in certain circumstances. This guide explains the main checks to carry out, where problems typically occur, and how to put a simple review process in place before making contributions.
