A tax charge (the “annual allowance charge”) arises after the annual allowance is exceeded. There is no limit on the amount of pension savings an individual can make each year but there is a limit in respect of the tax relief for those pension savings. The annual allowance charge will be added to the rest of your taxable income for the tax year in question when determining your tax liability. If the charge is more than £2,000, you can ask your pension scheme to pay the charge from your benefits. However this would mean that your pension scheme benefits would be reduced. As we are unaware of factors affecting your annual allowance, such as other income sources, other pension contributions and unused allowances from prior years, it’s your responsibility to track and monitor when you may exceed the allowance. PayStream will purely act in accordance with your instruction.  You may wish to speak with your pension advisor in this regard.