How Much Can I Pay Into a SIPP? Annual and Lifetime Allowance Rules

By Team SalaryCalculate · 7/10/2025

Self-Invested Personal Pensions (SIPPs) offer generous tax relief on contributions, but there are important limits you need to understand. This guide breaks down how much you can pay into a SIPP, how the annual and (historical) lifetime allowance work, and how to avoid unexpected tax charges.

Annual Allowance: The Main Limit to Watch

For most people, the Annual Allowance is the key cap on how much you can contribute to your SIPP each year while receiving tax relief.

Standard Annual Allowance

£60,000 for the 2024/25 tax year
Applies to total contributions (yours + employer’s)
Tax relief is only available on contributions up to 100% of your earnings, or £3,600 if you earn less

Tapered Annual Allowance

If your "adjusted income" exceeds £260,000, your annual allowance may be reduced:

For every £2 of income over £260,000, your allowance reduces by £1
Minimum tapered allowance: £10,000

Carry Forward: Use Unused Allowance from Past Years

You can carry forward unused annual allowance from the previous 3 tax years — if:

You were a member of a UK-registered pension scheme during those years
Your total contributions this year exceed the standard or tapered limit

This is especially useful if you receive a windfall, sell a business, or want to catch up after years of low contributions.

No or Low Income? You Can Still Contribute

If you have no earnings (e.g. a non-working spouse or early retiree), you can still contribute up to £3,600 gross per year:

You pay £2,880 net
HMRC adds £720 in basic rate relief automatically

Lifetime Allowance: Recently Abolished, But Still Relevant

The Lifetime Allowance (LTA) was abolished in the 2023/24 tax year — previously, it capped how much you could hold across all pensions before triggering a tax charge.

But: Some LTA protections and lump sum limits still apply.

Lump Sum Limits (2024/25):

Tax-free cash limit: 25% of your pension, up to £268,275 (unless protected)
Additional lump sums beyond this may be taxed as income

Learn more: GOV.UK – Changes to Lifetime Allowance

Example Scenarios

1. Basic Rate Taxpayer with £50,000 Salary:

Max tax-relievable SIPP contribution: £50,000
Total contribution cap: £60,000

2. High Earner with £300,000 Adjusted Income:

Tapered Annual Allowance: £10,000
Can use carry forward if unused allowance exists from prior years

3. Stay-at-Home Parent with No Earnings:

Max SIPP contribution: £2,880 net / £3,600 gross

Tips for Staying Within Limits

Track total contributions: Include employer + personal
Use a SIPP calculator to project and test scenarios
Submit a Self Assessment if claiming higher rate relief or exceeding allowances
Consider salary sacrifice for large contributions
Get advice if your income nears taper thresholds or you have protected benefits

Summary

You can pay up to £60,000 per year into a SIPP and receive tax relief, depending on your earnings and income level. With carry forward, even higher contributions may be possible. Understanding your annual limits — and how they interact with income and past contributions — is key to maximising your pension while avoiding surprise tax bills.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Speak to a qualified adviser before making pension decisions.