What is the lifetime allowance for pensions?
Answered 17 March 2026
This is an important question with a significant recent legislative change. Here is a comprehensive answer:
The Pensions Lifetime Allowance
What the law says
The lifetime allowance charge has been abolished from 6 April 2024.
Source records the legislative provision abolishing the lifetime allowance charge (the text of the provision itself has been omitted/repealed in the published version, indicated by the dotted lines, but the heading confirms: "Lifetime allowance charge abolished").
Historical standard lifetime allowance figures (for context and transitional purposes):
- The standard lifetime allowance was set at £1,250,000 for 2014-15 onwards
- It was reduced to £1,000,000 for 2016-17 and 2017-18, with CPI indexation applying thereafter
- Indexation was frozen at £1,073,100 for tax years 2021-22 through 2025-26
What replaced it — new allowances from 6 April 2024:
From 6 April 2024, the relevant limits are now the Lump Sum Allowance (LSA) and the Lump Sum and Death Benefit Allowance (LSDBA). The standard LSDBA at 6 April 2024 is £1,073,100, based on Schedule 9, Finance Act 2024.
HMRC guidance / practice
HMRC confirms that as of 6 April 2024, the lifetime allowance charge has been abolished, but individuals retain entitlement to have their lump sum allowance and lump sum and death benefit allowance protected.
The old protections (Fixed Protection 2012, 2014, 2016 and Individual Protection 2014, 2016) still have relevance under the new regime, as they can increase an individual's LSDBA above the standard £1,073,100:
| Protection | LSDBA |
|---|---|
| Fixed Protection 2012 | £1,800,000 |
| Fixed Protection 2014 | £1,500,000 |
| Individual Protection 2014 | Up to £1,500,000 |
| Individual Protection 2016 | Up to £1,250,000 |
Where benefit crystallisation events (BCEs) occurred before 6 April 2024, transitional calculations apply to determine the remaining available LSDBA.
In summary: There is no longer a lifetime allowance for pensions in the UK. It was abolished from 6 April 2024. The previous standard figure was £1,073,100. The new framework instead uses a Lump Sum Allowance and a Lump Sum and Death Benefit Allowance (standard: £1,073,100), which limit the amount of tax-free lump sums that can be taken from pension savings.
Citation sources
PART 1 Income tax, corporation tax and capital gains tax Pensions Freezing the standard lifetime allowance 28 Section 218(2C) and (2D) of FA 2004 (indexation of standard lifetime allowance) do not apply in relation to the standard lifetime allowance for the tax years 2021-22, 2022-23, 2023-24, 2024-25 and 2025-26 (so that the amount of the standard lifetime allowance for each of those tax years remains at the amount for the tax year 2020-21, namely £1,073,100).
Paragraph 1 Schedule 6 Finance Act 2014 Individuals who had pension savings in excess of £1,250,000 could apply to HMRC for IP14 protection from the lifetime allowance charge when those rights come in payment after 5 April 2014. As of 6 April 2024, the lifetime allowance charge has been abolished, but an individual is entitled to have their lump sum allowance (see PTM171000) and lump sum death benefit allowance (see PTM172000) protected. Individuals with IP14 that have had benefit crystalli
Paragraph 9 Schedule 4 Finance Act 2016 Individuals who had pension savings in excess of £1,000,000 could apply to HMRC for IP16 protection from the lifetime allowance charge when those rights came into payment after 5 April 2016. As of 6 April 2024, the lifetime allowance charge has been abolished, but an individual is entitled to have their lump sum allowance and lump sum and death benefit allowance protected. Individuals with IP16 that have had benefit crystallisation events prior to 6 A
Paragraph 9 Schedule 4 Finance Act 2016 On 5 April 2016, Individuals who had pension savings in excess of £1,000,000 could apply to HMRC for IP16 to protect them from the lifetime allowance charge when those rights come into payment after 5 April 2016. As of 6 April 2024, lifetime allowance has been abolished, but an individual is entitled to have their lump sum allowance and lump sum death benefit allowance protected. Individuals did not need to have already built-up pension savings of mo
PART 1 Income tax Pensions Standard lifetime allowance from 2016-17 19 1 Section 218 of FA 2004 (pension schemes etc : lifetime allowance) is amended in accordance with subsections (2) to (5). 2 For subsections (2) and (3) (standard lifetime allowance is £1,250,000 but may be increased by Treasury order) substitute— 2 The standard lifetime allowance for the tax years 2016-17 and 2017-18 is £1,000,000. 2A The standard lifetime allowance for any later tax year (“the subsequent tax year”) is the sa
Part 1 Income tax, corporation tax and capital gains tax Pensions Lifetime allowance charge abolished 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 637S Income Tax (Earnings and Pensions) Act 2003 Paragraphs 126, 127 and 131 Schedule 9 Finance Act 2024 At 6 April 2024 an individual’s lump sum and death benefit allowance is £1,073,100 unless they have a protected right to a higher lump sum (see PTM172000) or have had a benefit crystallisation event occur prior to this date (see PTM174200). The lump sum death benefit allowance applies to certain lump sums paid after 5 April 2024. When a relevant lump sum death benefit is paid to a ben
PART 1 Income Tax, Corporation Tax and Capital Gains Tax CHAPTER 4 Pensions Lifetime allowance charge: new standard lifetime allowance for the tax year 2014-15 and subsequent tax years 48 1 Section 218 of FA 2004 (standard lifetime allowance etc ) is amended as follows. 2 For subsection (2) substitute— 2 The standard lifetime allowance for the tax year 2014-15 and, subject to subsection (3), subsequent tax years is £1,250,000. 3 In subsection (3) for “the tax year 2012-13” substitute “ the tax y
Paragraph 1 Schedule 6 Finance Act 2014 On 5 April 2014, Individuals who had pension savings in excess of £1,250,000 could apply to HMRC for IP14 to protect them from the lifetime allowance charge when those rights come into payment after 5 April 2014. As of 6 April 2024, lifetime allowance has been abolished, but an individual is entitled to have their lump sum allowance and lump sum death benefit allowance protected. Individuals did not need to have already built-up pension savings of mor
Paragraph 126 Schedule 9 Finance Act 2024 For an individual with FP12, their lump sum and death benefit allowance (LSDBA) will be £1,800,000 and they will be subject to the transitional lump sum and death benefit allowance calculations (see PTM174200). If an individual has taken less of their benefits before 6 April 2024 as tax-free lump sums than assumed under the standard transitional calculation, and the individual has complete evidence of this, they can request a transitional tax-free amou