SPS Argos Section

Pensions & tax

The Lifetime Allowance (LTA) is the total pension savings you can have without paying an extra tax charge.

In March 2023, the Government announced that the tax charge would be abolished from April 2023, and from April 2024 the LTA will cease to exist. At the same time, the maximum tax-free cash you can take at retirement has been capped at £268,275 (or 25% of the last LTA of £1,073,100) - unless you have an earlier LTA protection (see below).

The LTA was first introduced in 2006 and successive governments have raised or lowered it over that time. Members were able to avoid a tax charge by applying for ‘protection’ from HMRC. If you applied for protection when the LTA was higher than its final level of £1,073,100, you may be eligible to take a higher tax-free cash amount.

There is further information on the LTA here: www.gov.uk/tax-on-your-private-pension/lifetime-allowance