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Manage contributions

What is the annual contribution limit (ACL)?

The annual contribution limit (ACL) is the maximum amount that can be contributed to any member’s NEST retirement pot in a tax year. This includes member and employer contributions, additional contributions, as well as tax relief if the member is eligible to receive it. The ACL for the 2016/17 tax year is £4,900. This figure is adjusted annually in line with average earnings.

The ACL will be removed in April 2017. This means the restrictions will be lifted before minimum contributions rise to 5 per cent in October 2017, so employers will be able to use NEST for all their workers if they want to.

The limit for the 2016/2017 tax year applies to the period 6 April 2016 to 5 April 2017. It's independent of both the worker's joining date and the date you start using NEST. For example, if you start using NEST in January 2017 and you enrol a worker in the same month, up to £4,900 can be paid into the member's NEST account in the remaining three months of the 2016/17 tax year without going over the limit. The following year the limit would apply across the whole of the new tax year, though the limit amount would be different.

If you use qualifying earnings as your earnings basis you’ll always be able to pay minimum contributions for your workers within the ACL. This is because the qualifying earnings band is capped at the upper limit, so however much a worker earns, their qualifying earnings will remain the same. All employer contributions, member contributions, tax relief and any additional contributions paid by the member, count towards the ACL.

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