Annual Allowance in the year of retirement

spiralir

How is the Annual Allowance calculated in the year of retirement?

For example, if retiring at the end of September is the AA the lower of
(SalaryAprToSep + PensionOctToMar) and £60000?

Mutton_Geoff

spiralir said:

How is the Annual Allowance calculated in the year of retirement?

For example, if retiring at the end of September is the AA the lower of
(SalaryAprToSep + PensionOctToMar) and £60000?

No, your AA is just that. If you have any unused AA from previous years, you can put that in as well, all up to a max of your annual income in the current tax year.

Secret2ndAccount

You get a full year's annual allowance on the 1st day of the tax year. That's 60k + carry forward. If you take State Pension or a DB Pension, or up to your 25% tax free from a DC pension, that limit stays in place. If, however, you take any part of the taxable element of a DC pension, your AA immediately drops to 10k. No problem if you've previously exceeded it (so get your contributions in early), but you will likely find you can't contribute any more.
That's the annual allowance - a fairly absolute limit on all contributions (you + your employer + the taxman). Exceed this and you pay a penalty.
Then there's the (separate) limit for tax relief. That limit is your earned income - pension doesn't count. It is technically permitted to pay in more. There are edge cases where it might make sense, but generally it doesn't as you don't benefit from any tax relief. Also, your provider's software might throw a fit.

spiralir

Thank you. A very clear answer.