With effect from 6 April 2024, there will no longer be a Lifetime Allowance (LTA) which limits the amount of tax-efficient pension savings that you can build up. Instead, cash sums will be assessed against new allowances, with any excess subject to the recipient’s marginal rate of income tax.

There are two main allowances:

1. The Lump Sum Allowance of £268,275 is the new limit on the tax-free cash sums you can receive in life.
2. The Lump Sum and Death Benefit Allowance of £1,073,100, is the new limit on the tax-free cash sums that can be paid in life and death. On death after age 75 death benefits are taxed at the beneficiary marginal rate.

Exceptions, protections and transitional arrangements may apply:

• Exceptions – some cash sums don’t use up the allowances, e.g. small cash lump sums.
• Protections - if you have LTA protection and/or lump sum protection, you’ll retain your right to any higher protected tax-free cash sum.
• Transitional arrangements – if you used up part of the LTA, your new allowances will be reduced.

For more information visit www.gov.uk/tax-on-your-private-pension/lump-sum-allowance.gov.uk/tax-on-your-private-pension