The Pension Lifetime Allowance Explained

More than 1 million workers are likely to breach the pension lifetime allowance and be liable for a hefty tax bill - are you one of them? Here's what you need to know about the LTA

Faith Glasgow 22 February, 2021 | 10:07AM
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Lifetime Allowance

Most people have more pressing matters to worry about than whether their pension pot will exceed the Lifetime Allowance (LTA) - in fact, it almost sounds like a nice problem to have. But more than 1 million working people are at risk of breaching this allowance - and being landed with a tax bill. 

The Lifetime Allowance is the upper limit on the total value of payouts that can be taken from all of your pension schemes without a tax penalty. According to a 2019 report by Royal London, as many as 1.25 million people still in work are at risk of breaching the LTA by the time they retire – and these are not business moguls or superstars, but ordinary working folk.

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About Author

Faith Glasgow  Faith Glasgow is a freelance journalist specialising in pensions and investment trusts

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