Briefing

Lifetime allowance briefing: Understanding the lifetime allowance for your NHS staff

This briefing supports your conversations with members of the NHS Pension Scheme about lifetime allowance.
Pensions

26 March 2020

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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.