RPSM06103010 - Technical Pages: Annual allowance: Up to 5 April 2011: The pension input amount for defined benefits arrangements: Valuing pension savings

Valuing pension savings

This guidance explains the annual allowance rules up to 5 April 2011. If you want to know how the annual allowance works after that date see RPSM06105000.

In a defined benefits arrangement, the pension input amount is the amount of any increase in the value of the individual’s rights under the arrangement during the pension input period of the arrangement that ends in the tax year.

For this purpose, a comparison is made between the value of the individual’s rights under the arrangement at the beginning of the pension input period and the value of those rights at the end of the pension input period. There will be an increase in the value of the individual's rights under the arrangement during the pension period if:

1. the value of the individual’s rights under the arrangement at the beginning of the pension input period (the “opening value”) is less than
2. the value of the individual’s rights under the arrangement at the end of the pension input period (the “closing value”)