The two new allowances are:

 

Description

Limit

Lump Sum Allowance (LSA)

The total amount of tax-free cash an individual member can receive across all pension schemes at retirement.

£268,275*

Lump Sum and Death Benefit Allowance (LSDBA)

The overall limit on the amount of tax-free money paid out during an individual’s lifetime.

£1,073,100*
*If you have Lifetime Allowance protection, or you’ve applied to HM Revenue & Customs for a protected allowance, you may be entitled to a larger amount.

How could this change affect me?

Any lump sum benefits paid before 6 April 2024 count towards these new allowances. If any lump sum you wish to take exceeds your available LSA or LSDBA, we may need to limit the amount of lump sum we can pay you. If this happens, we’ll contact you to let you know your options.

You'll continue to receive certificates that refer to both the Lifetime Allowance and Lump Sum Allowance throughout 2024/25.

You may also receive documents that still refer to the Lifetime Allowance while these changes are brought in.

If you have previously taken benefits from the scheme and need to provide another pension scheme with a ‘Transitional Tax-Free Certificate’, we can supply these on request.

 

What you'll need to do when applying for your pension benefits.

We'll send you a Declaration Form to complete. If you answer ‘Yes’ to any of the HMRC questions, you must provide the supporting information requested so we can work out how much of your allowances you’ve already used and how much you have remaining. If you have pensions with other providers, you will need to contact them to obtain this information.

Share this