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The maximum amount that an individual can build up in tax-relieved pension savings is limited in two ways:

1. •

   first, the annual allowance limits the amount that can be paid into pensions and benefit from tax relief (or the value attributed to increases in scheme benefits for defined benefits pensions). Its operation is discussed below

2. •

   second, prior to 6 April 2023 the lifetime allowance limited the total tax-relieved value that could be accumulated into registered pension schemes. Its operation and the lifetime allowance charges that could have arisen before 6 April 2023 are discussed in the Lifetime allowance guidance note

The annual allowance in relation to pension arrangements is the maximum amount:

1. a)

   by which a member’s benefits can increase in a pension input period (for defined benefit schemes), plus

2. b)

   that can be contributed to pension arrangements in a pension input period (for defined contribution or money purchase schemes)

The total of these figures is the pension input amount (see below).

If the pension input amount exceeds the annual allowance,