£40,000 is the maximum amount that can be contributed into your pensions each tax year. This limit is the combined contributions by you, your employer and any tax relief you receive from the government. Find out more about pension tax relief.
If you earn less than £40,000, your annual pension limit is the value of your annual salary. From 6th April 2016, individuals who have income for the tax year of above £150,000 will have their pension annual allowance for that tax year tapered, meaning it will reduce depending on their earnings. The annual allowance does not apply to pension transfers.
There is also a lifetime allowance with pensions. This is the upper limit on pension benefits you’re allowed to receive before you have to pay tax. The lifetime allowance is currently £1m, as of 6 April 2016. Find out about the tax rules around the lifetime allowance.