Understanding individual pension contributions

For financial advisers only

On completion of this module you should be able to:

  1. explain what limits may apply to pension funding
  2. describe how tax relief is provided on pension contributions
  3. explain how making a pension contribution could restore lost personal allowance or child benefit

Introduction

Pensions are the most tax efficient way to save for retirement. Tax relief on contributions combined with virtually tax free investment growth and the ability to access a quarter of the fund tax free make them the ideal for this purpose. But how much an individual can contribute to their pension may be limited by their earnings and allowances. In order to maximise pension savings it is essential that advisers fully understand how much an individual can pay into their pension.

This module should take around 30 minutes to complete. It includes a short self-assessment quiz to test what you’ve learned and a 30 minutes CII/PFS accredited CPD certificate can be claimed.

This module looks at how much an individual can contribute to their pension and what factors may limit funding. It outlines how tax relief is given and some of the indirect benefits of making a pension contribution.

Please read our Technical guide – Individual Pension Contributions before attempting the self-assessment questions.