Savers can also not contribute more than 100 per cent of their earnings to a pension during the tax year.
On top of this there is the lifetime allowance, which is currently set at £1,073,100 and frozen at that level until 2025/26.
4 Using carry forward for unused allowances
Pensions carry forward rules allow savers to use unused allowances from up to the three prior tax years in the current tax year - provided they have already maximised their current annual allowance and are still in the same scheme.
Tax relief would be applied at the saver's current marginal rate and so carry forward can be very attractive to someone whose earnings have risen significantly.
However, "it is worth noting that you are still limited to 100 per cent of your salary in the tax year you are making the contribution, regardless of how much you have available from previous allowances," said Higham.
5 Accessing pensions tax-free
From pension access age, currently 55, up to 25 per cent of a pot can be accessed tax free – with the remaining 75 per cent available as taxable income.
This option is not suitable for everyone but could suit some under the right circumstances.
6 Triggering the money purchase annual allowance
Those planning to access their pensions flexibly need to think carefully about both the tax impact and the effect it will have on their ability to save further amounts into pensions in the future, warned Lowery and Higham.
Under current rules, introduced to stop the recycling of money through pensions, anyone who makes a flexible withdrawal from their retirement pot beyond the 25 per cent tax-free lump sum triggers the 'money purchase annual allowance'.
This permanently cuts their annual allowance from £40,000 to just £4,000, and revokes the privilege to carry forward unused allowances from previous tax years.
7 Reclaiming overpaid tax on pension freedom withdrawals
When taking a flexible payment from a pension, HMRC assumes it is just the first of 12 monthly withdrawals. As a result it is likely to be taxed at an emergency rate and will probably mean significant overtaxation.
Taxpayers can get this money back through their self-assessment tax return, or by applying to HMRC.
8 Declaring the high-income child benefit tax charge
If a taxpayer or their partner has claimed child benefit, and one of them earns more than £50,000 a year, they will be liable for the high-income child benefit tax charge.
This needs to be paid through self-assessment and increases the more the person earns. Above £60,000 it equals the total amount of the child benefit.
This means lots of people choose not to claim child benefit, said Higham, but by not claiming, they might miss out on National Insurance credits that count towards state pension entitlement.
