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What is the lifetime allowance?

Watch our video and download our guide to understand how the lifetime allowance limits the amount you can put into your pension over your lifetime whilst still receiving tax benefits.

If the total value of all your pensions (including salary-related schemes, personal pensions and any pensions that have already paid out an income or lump sum but excluding the State Pension) is close to £1.0731 million, or is likely to reach this by the time you retire, you should consider the lifetime allowance (LTA).

The LTA is a limit on the total value of your pension benefits (excluding State Pension) that will enjoy full tax benefits (or before a tax penalty applies). Once you exceed your lifetime allowance any excess will be subject to tax charges of 55% if you're taking the money as a lump sum or 25% if you’re taking the money as income (the income withdrawn will still be taxed like any other earnings) or transferring overseas.

The Lifetime Allowance explained

This video explains what the Lifetime Allowance is and what happens if you go over it.

Watch time: 2 mins 33 seconds


Lifetime Allowance calculator

You can use our calculator to help you assess the current and future position of your pension savings and see if you need to seek advice. You simply need to provide details of your earnings and all your pension contributions, plus any other income you pay tax on.

Once you’ve entered these into the calculator it will display an estimate based on the information you’ve given us.

Lifetime Allowance calculator

Download our lifetime allowance guide

Read our lifetime allowance guide to find out how this may affect your retirement planning.

Download the guide

The value of investments can go down as well as up, so you may get back less than you invest. Tax treatment and eligibility to invest in a pension depend on personal circumstances. All tax rules may change in future.

This information is not a personal recommendation for any particular product, service or course of action. Pension and retirement planning can be complex, so if you are unsure about the suitability of a pension investment, retirement service or any action you need to take, please call our Workplace Investing Service Centre on 0800 3 68 68 68 or refer to an authorised financial adviser.

The minimum age you can normally access your pension savings is currently 55, and is due to rise to 57 on 6 April 2028, unless you have a lower protected pension age.