We're always told that planning for your future is one of the most important things and pension contributions are the single best way you can do this planning.

You're told by the government, every financial advisor and every finance YouTube channel about the importance of putting money towards your pension. Many recommend you contribute much more than the minimum requirement of 8%.

I am generally a big proponent of financial planning and I agree that planning for retirement is very important.

But it's also really important to be aware of the fact that if you save too much into your pension, it can be a really bad thing.

The UK Government has introduced a Lifetime Allowance for pension pots which sounds very high - it is over £1,000,000.

But although that sounds crazy, if someone one a median wage contributes the minimum amount from 21 to 68 which is the current target retirement age, their pension pot will actually be bigger if it grows at an average rate of 8% per year.

If you happen to earn more than the median wage for a good chunk of your career or your investments do better, your pension pot could be much bigger than that.

And if it is... the UK Government will tax you 55% of any amount over the limit if you take it out as cash or 25% if you buy an annuity... before then taxing your annuity as income as well.

Unfortunately this is something that just doesn't get mentioned at all when people talk about pensions and given that this may actually apply to a significant number of people as it stands, it's important to take it into account when you're making your financial decisions.

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