Lifetime allowance
13/04/2024
Effective from 6th April 2024, the Lifetime Allowance has been abolished.
While there won’t be a Lifetime Allowance limit on the overall pension benefits, it’s important to keep in mind that there will still be a cap on tax-free payments from pension schemes.
A ‘Lump Sum Allowance’ for tax-free cash when a member starts receiving retirement benefits, and a ‘Lump Sum and Death Benefit Allowance’ for tax-free death benefits to beneficiaries.
Anything exceeding these limits will be considered taxable benefits and subject to taxation at the recipient’s marginal income tax rate.
Members who have already used 100% of their Lifetime Allowance on commencing retirement benefits will have no further tax-free allowance.
If you have a valid form of Lifetime Allowance protection your new lump sum allowances would be higher than the above standard amounts.
