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From 6 April 2024, HMRC have placed limits on the amount of money that can be taken tax-free from pensions. These limits are measured against allowances used up by money taken during your lifetime and any money paid when you die.
The standard Lump Sum Allowance is £268,275 and the standard Lump Sum & Death Benefit Allowance is £1,073,100. These allowances reduce each time you take money tax-free from pensions.
Your personal allowances may be higher than the standard amounts if you’ve applied successfully for one or more protections from HMRC.
You can find out more information about the changes and new allowances in our Frequently Asked Questions or on the HMRC website: gov.uk/tax-on-your-private-pension.
If it is likely that the new allowances are going to affect you, you may need to request a Transitional Tax Free Amount Certificate from us, or any of your other pension providers.
Whoever provides your certificate, from 6 April 2024 we need to have a copy of this certificate on record before you take any more pension lump sums.
Building your pension pot
For the 2023/24 tax year, the Lifetime Allowance is the maximum amount of pension savings you’re allowed to build up during your lifetime and take some of the benefits tax free.
From 6 April 2024, the Lifetime Allowance for pensions has been removed and replaced with new allowances that limit the amount of tax-free benefits that can be taken rather than the pension savings you can build up.
It’s important that you understand how these changes may affect your retirement planning.
