Lifetime allowance briefing

26 / 03 / 2020

Lifetime allowance is the amount of pension savings an individual can make over a working lifetime without paying tax. If an individual’s total pension savings exceed the lifetime allowance, a tax charge is due on the excess benefits. 

Employees are more likely to be affected by the lifetime allowance if they have long service in the NHS Pension Scheme, a high income and benefits in other workplace or personal pension schemes. Encouraging staff to engage with their pension savings earlier may help employees take steps to mitigate a tax charge at retirement. 

Our new briefing provides key information, including: 

  • what lifetime allowance is 
  • the lifetime allowance charge
  • who is likely to be affected
  • options for affected staff. 
Pension tax is a complex area and we have published a series of resources on our pension resource library to support your conversations with staff. 


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