Abolition of the lifetime allowance

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

The original of this content is available on Lexis+ Practical Guidance (Pensions).

Until 5 April 2024, one of the key restrictions imposed on the accrual of members’ benefits under the pensions tax regime is the lifetime allowance, which caps the amount of benefits that can be saved and drawn by and in respect of an individual from their registered pension schemes without triggering tax charges. For more details, see the Lifetime allowance guidance note.

From 6 April 2024, the lifetime allowance is abolished in order to encourage older inactive individuals to return to work by removing a tax disincentive. This abolition is achieved in two stages: the lifetime allowance charge was abolished from 6 April 2023 but the rest of the regime framework remained in place, and the lifetime allowance and associated legislation is repealed from 6 April 2024.

This guidance note provides an overview the abolition of the lifetime allowance, the changes to the pensions tax regime with effect from 6 April 2024 and the rules in force for the 2023/24 tax year. However,

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