Who contributes to a pension?

Contributors to your pensions depends on the type of pensions you have, and how they were set up.

Workplace pensions

If you have a workplace pension, your employer will make contributions on your behalf, paying money directly into your pension. You can also make contributions yourself, either directly or through salary sacrifice and other methods that take the money straight from your pay.

Personal pensions

If you have a personal pension, you contribute to it yourself. You can usually either contribute regularly or make one-off payments when you can afford it. If you are self employed with a limited company you may want to contribute through your business via employer contributions.

State Pension

Your UK State Pension is based on your National Insurance (NI) contributions. To start receiving the State Pension, you'll need to have paid at least 10 years NI contributions. To receive the full UK State Pension, you'll need to have paid 35 years NI contributions.

 

What are your pension contribution limits?

The government sets a limit on how much you can pay in to your pensions before incurring tax charges. This is your 'annual allowance'. For the 2021/22 tax year, the standard annual allowance is £40,000. This is a combined total across all of the pensions you're paying into. It could be less, depending on your individual circumstances.

Be careful not to confuse your annual allowance with your 'lifetime allowance'. That's the limit of how much your pension pot can be worth before you incur additional tax charges. The current lifetime allowance is £1,073,100.

 

How does the government contribute to my pensions?

The government contributes to your pensions in the form of tax relief. The amount contributed depends on tax rules and your individual circumstances. Visit our page on pension tax relief for more information.

 

Can I 'top-up' my pension contributions?

State Pension contributions

If you have gaps in your National Insurance (NI) contributions, for example because you were:

  • self-employed
  • working abroad
  • unemployed but not claiming benefits

then you can pay to make up any gaps. You can check your NI history for gaps here.

Workplace pension contributions

You'll usually be able to top up any contributions your employer makes by paying into your workplace pension yourself. If you need more flexibility, you can also open a personal pension to boost your overall pension pot.