The maximum value of pension benefits that can build up during your lifetime without incurring a tax charge is known as the lifetime allowance (LTA). The limit set by the Treasury is currently £1,073,100 and will remain at this rate until 5 April 2026.
The LTA takes into account pension benefits like your EAPF pension, additional voluntary contribution funds, personal and group personal pensions, stakeholder pensions, retirement annuity contracts, rights preserved in other occupational schemes, pensions already in payment and pension credits following divorce settlements.
Every time you draw benefits from a pension arrangement after 5 April 2006, you should be told by the pension provider the percentage of the LTA used.
When you become entitled to receive a pension benefit, you'll have to advise your pension provider of the amount of LTA already used (if known).
If the total value of your pension rights exceed the LTA, you'll be subject to a tax charge in addition to the normal application of income tax.
Capita will write to you if you've exceeded the LTA, but it's important to remember that Capita will only have details of your current EAPF pension, so you'll need to let them know of any other pension benefits you've built up elsewhere.