Key pension facts

Threshold and adjusted income


Threshold and adjusted income are terms relevant for the tapered annual allowance.

In order for the tapered annual allowance to kick in (whereby annual allowance is reduced by £1 for every £2 above the threshold down to a minimum of £4,000), both threshold and adjusted income need to be above £200,000 and £240,000, respectively, as of 2020/21. Threshold income is generally just your regular earnings whereas adjusted income includes your pension contributions for the year.

See also our Tax Benefits of a Pension blog post.

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