Removal of the Lifetime Allowance

On 6 April 2024, the Lifetime Allowance (LTA) was abolished. The LTA set a limit of £1,073,100 on the amount of pension that could be built up over your lifetime, without triggering a tax charge. It has instead been replaced by two lump sum allowances:

• The Lump Sum Allowance (LSA) which limits the total amount of tax-free cash that you can take from your pension arrangements to £268,275*.

• The Lump Sum and Death Benefit Allowance (LSDBA) which limits the total amount of tax-free cash that can be paid from all of your pension arrangements during your lifetime and following your death, to £1,073,100*.

You, or your beneficiaries, may be liable for tax if you go over either of these two new allowances. For further information, see the ‘Tax-free lump sum allowances for pensions’ article at www.moneyhelper.org.uk/en or for more detail, see www.gov.uk/tax-on-your-private-pension

If you think that you could be affected, you should speak to a regulated financial adviser.

*Your allowances might be higher if you have, or apply for, lifetime allowance protection.