The lifetime allowance (LTA) is the total capital value of all your pension arrangements which you can build up without paying extra tax. If the value of your benefits, when you take them, exceeds your lifetime allowance, a tax charge will be made against the excess.
The lifetime allowance for 2020/2021 is £1,073,100 (1 million, 73 thousand, 1 hundred).
The lifetime allowance covers any pension benefits you may have in all tax-registered pension arrangements, not just this scheme.
The total value of your pension benefits assessed against the LTA does not include:
- any State retirement pension
- State pension credit
- spouse's pension
- civil partner's pension
- dependant's pension you may be entitled to.
Most scheme members' pension savings will be significantly less than the lifetime allowance.
There are protections for those affected by the lifetime allowance. View information in Tax controls and pensions.