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Annual allowance
The Annual Allowance for Section 1 members is the amount you and your employer can contribute towards your pension in a tax year.
The Annual Allowance will not apply in the year when your benefits under the Plan are taken in full.
The Annual Allowance will start at £215,000 in 2006 and increase each year up to 2010, when the government will review it.
Annual Allowance Figures
| Tax Year | Annual Allowance |
|---|---|
| 2006/7 | £215,000 |
| 2007/8 | £225,000 |
| 2008/9 | £235,000 |
| 2009/10 | £245,000 |
| 2010/11 | £255,000 |
Exceeding the Annual Allowance
Under the O2 Pension Plan you will not be prevented from exceeding the Annual Allowance, however you may wish to consider carefully whether you wish to make savings that may result in you exceeding the Annual Allowance. Benefit accrual and contributions above the Annual Allowance will be subject to immediate tax at your marginal rate. Furthermore, these benefits may also be taxed on them being paid.
Should you be making contributions that may result in you exceeding the Annual Allowance, you should consider taking financial advice to ensure that you are saving in the most efficient way for you.
