As of 6 April 2024 the Lifetime Allowance (LTA) was replaced by the Lump Sum Allowance (LSA). Individuals are entitled to a Lump Sum Allowance of £268,275 unless they have a protected right to a higher lump sum allowance (explained below).
If an individual exceeds £268,275 when a relevant benefit crystallisation event occurs, the excess of the lump sum will be subject to income tax at the individual’s marginal rate. For more information please see HMRC’s Pensions Tax Manual.
As Pension Administrators, we are legally obliged to provide scheme members with a Pensions Savings Statement relating to Annual Allowance, where the pension savings in the pension input period are more than the annual allowance. This must be provided before 6 October following the end of the relevant tax year.
If it is an estimate of your Annual Allowance that you require, please use the LGPS Annual Allowance – Quick Check Tool, or alternatively, contact your Independent Financial Advisor (IFA) to arrange this. To find your nearest IFA check out the MoneyHelper website.
More information, including factsheets covering both annual and lifetime allowance, can be found on the national LGPS website at Tax controls and your pension and you can watch the videos below.
Please also find an annual allowance guide here.