Is there a limit on how much I can pay into a pension?

There used to be a complicated set of rules about how much you could pay into different types of pension each year.

But these have now mostly been swept away. Instead of a focus on how much you can pay in each year, there is now a life-time limit of £1.5 million. If you save more than this, then you start to pay penal rates of tax.

Pension built up in a salary related scheme counts against this limit. There is a formula for giving the pensions promise made by such a scheme a cash value.

The one annual limit that remains is that you cannot contribute more than £215,000 or 100 per cent of your earnings (whichever is the lower) to one or more pensions.

You can find out more about the tax treatment of pensions and the lifetime cap on the Inland Revenue website.