Lifetime Allowance

Lifetime Allowance

Lifetime Allowance is the limit on the amount of pension benefit(s) that you can take from all of your registered pension arrangements, before you incur a tax charge. These benefits include:

  • lump sums; and
  • retirement income.

The current standard Lifetime Allowance is £1.055m.

We will calculate your Lifetime Allowance either when you retire, or at age 75 if earlier. We calculate this by:

  • multiplying your annual pension payment by 20; and
  • adding any lump sum entitlement.

Based on the current standard Lifetime Allowance, if your benefits exceed the amounts listed below, you may incur a higher tax bill:

Scheme

Benefits  

classic

Pension per annum of £44,782.61

Automatic lump sum of £134,347.80

premium, nuvos, alpha

Pension per annum of £51,500.00 (if taking no lump sum)

classic plus

Between £44,782.61 and £51,500 per annum plus any automatic lump sum

 For information

If your total pension benefits were in excess of £1.25m at 5 April 2016, you are able to protect your Lifetime Allowance. The two protections available are:

  • Fixed Protection 2016; and
  • Individual Protection 2016.

Further information can be found on the gov.uk website using this link: https://www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance