Annual Allowance
The Annual Allowance (AA) is the amount of pension savings that can be made in a single tax year before extra tax is payable. The AA for the 2016/17 and 2017/18 tax years is £40,000 for most people, but it will be less for those whom the pensions tax regime deems to be on “high income”. Broadly speaking, if your total taxable income is above £110,000 (which includes any taxable income from outside of your Allen & Overy employment) in a tax year, then you could have a personal AA which is below £40,000. The Firm as your employer does not have visibility of all your income so you will need to calculate what your personal AA limit is. Please see the Money Purchase Annual Allowance and Tapered Annual Allowance definitions.