Lifetime Allowance
The former cap on the total value of pension benefits an individual could accumulate across all registered pension schemes without incurring a tax charge, which was set at £1,073,100 before its abolition from 6 April 2024. Although the Lifetime Allowance charge no longer applies, transitional protection arrangements remain relevant for those who applied for Fixed or Individual Protection before the abolition. Legacy documentation and financial planning discussions still frequently reference this term.
Related Terms
Annual Allowance
The maximum amount you can contribute to registered pension schemes each tax year while still receiving tax relief, currently set at £60,000.
Tapered Annual Allowance
A reduced Annual Allowance for individuals whose adjusted income exceeds £260,000, with the allowance reduced by £1 for every £2 of income above that threshold.
Pension Tax Relief
A government top-up on pension contributions that effectively returns income tax paid on the contributed amount, making pensions a highly tax-efficient saving vehicle.
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