An amount paid into an investment, such as a pension contribution or an ISA contribution.
Pension contributions can be made by an individual or their employer or both. Individual contributions are eligible for income tax relief, an incentive from the government to encourage saving for retirement. The maximum tax relievable contribution that can be made each year depends on a number of factors; who is paying the contribution, how much was contributed in previous years, earned income and whether the Money Purchase Annual Allowance has been triggered.
ISA contributions are currently restricted to a maximum of £20,000.00 in any one tax year.
2 November 2022 at 07:56:31
This glossary definition has been deliberately kept as simple as possible to give a brief outline of the term to assist with general financial knowledge. It is not intended to give a detailed explanation. Please refer to our Legal Declarations.