What is Pension annual allowance?
The annual allowance is the most that can be paid into your UK defined contribution pensions in a tax year, by you or anyone else such as your employer, before a tax charge applies. It can be reduced for people with very high incomes, and unused allowance from earlier years can sometimes be carried forward.
Why Pension annual allowance matters
Going over it means the extra contribution can be taxed, which cancels the relief it was meant to earn.