You get tax relief on your pension contributions, up to a limit. There are caps on the amount of tax-free pension savings you can build up in the scheme. If you go over the limit, you could face a tax penalty on the excess.

Your E.ON UK benefit statement tells you more about your personal tax allowances.

Annual Allowance

The Annual Allowance is the total you can pay into all your pension arrangements each tax year before you are liable for tax. The limit is currently set at £40,000 per year.

If your annual pension savings go over this limit, you may have to pay a penalty charge – unless you have unused Annual Allowance from the previous three years that you can carry over. Learn more about the Annual Allowance.

Some higher earners may have a lower allowance - see the Tapered Annual Allowance section below for details.

Lifetime Allowance

This tax limit applies to all your pension arrangements over your lifetime, and currently stands at £1,073,100.

You can save as much as like into your pension. But once you start taking money out of your pensions (excluding the State Pension), you could be liable for an excess tax charge.

You usually find out if you are affected by this allowance when you retire because it is based on the benefits you actually get. You can apply for protection from this allowance. Learn more about the Lifetime Allowance.

Tapered Annual Allowance

You will need to think about all your income over the tax year, such as earnings from work, your pension savings, and any other sources like shares and buy to lets. You will be affected by this Allowance if this combined income is over £240,000 and your taxable income is over £200,000.

Money Purchase Annual Allowance

This tax limit applies to your defined contribution pension and is currently £4,000. You could be affected if you take savings from your additional voluntary contribution arrangement with E.ON UK (for example, as cash or an annuity) and then pay more in.

The tax limits are subject to change. Find out more.