Lifetime Allowance Management

The lifetime allowance is the maximum amount that you can hold in a pension fund before attracting a tax charge. If the Lifetime Allowance Is Exceeded:

  • Pension benefits taken as a lump sum are taxed at 55%
  • Pension benefits taken as a pension are taxed at 25% (and any income taken from the fund will be taxed at your marginal rate of income tax)

A test is made against the lifetime allowance each time a pension benefit is accessed. The lifetime allowance applies to the value of the pension fund at the point it is first drawn – not its value today.

Lifetime Allowance Management and planning is therefore crucial to avoid high tax charges above the LTA limit. There are various potential routes you may take to protect your pension fund. We work with clients to understand their personal circumstances and guide them through this complex area of area of pension planning to find the right solution for them.

To learn more download our free guide or for an initial no obligation discussion on the potential best way forward for you call 0800 043 8341 or Email enquiries@thepensionreveiew.com.