Since 6 April 2024, the old ‘Lifetime Allowance’ (which was a limit on the amount of pension benefits that can be paid from a person’s pension schemes without triggering a tax charge), has been replaced with a ‘Lump Sum Allowance’ (LSA) of £268,275. The LSA limits the amount of tax free lump sums (and the tax free elements of lump sums) that you can take in your lifetime.
You’ll also need to have available Lump Sum and Death Benefit Allowance (LSDBA), which, at £1,073,100, is higher than the LSA. If you have available LS, you will usually have sufficient LSDBA, unless you have taken a Serious Ill Health Lump Sum from another pension arrangement.
Changes to deferred member annual pension statements
As a result of the LTA being replaced by the LSA, this means that page 7 of your deferred member digital annual pension statement will look slightly different. From this year, it will no longer need to show the percentage of the LTA that your deferred EAPF pension benefits have used.
For more information on the abolition of the LTA, as well as the introduction of the LSA and LSBA, please visit https://www.gov.uk/government/publications/lifetime-allowance-guidance-newsletter-march-2024/lifetime-allowance-guidance-newsletter-march-2024