The March 2024 Budget – pension news

On 6 April 2024, the Lifetime Allowance (LTA) was abolished. This set a limit of £1,073,100 on the amount of pension that could be built up over your lifetime, without triggering a tax charge. It has instead been replaced by two lump sum allowances:

New lump sum allowances:

• The Lump Sum Allowance (LSA) – limits the total amount of tax-free cash that you can get from your pension arrangements to £268,275.
• The Lump Sum and Death Benefit Allowance (LSDBA) – limits the total amount of tax-free cash that you can get in your lifetime to £1,073,100. The LSDBA applies to payments that use up your Lump Sum Allowance, as well as other tax-free elements of serious ill health claims and other non-taxable lump sum death benefits.

The new limits are per person and apply across all registered pensions that you are part of.

If you receive a lump sum that exceeds these new limits, it will be taxed at your marginal rate.

Anyone who has valid LTA protection or lump sum protection will retain their rights to higher protected amounts.

If you think that you could be affected by these new lump sum allowances, you should speak to a regulated financial adviser.