Until April 2023, the Lifetime Allowance (LTA) led to a tax charge if the value of your benefits exceeded £1,073,100. The LTA was removed altogether from 6 April 2024.
The LTA has now been replaced by two new allowances, the lump sum allowance and the lump sum and death benefits allowance.
The Lump Sum Allowance
This is the maximum tax-free lump sum you can receive from all your pension savings when you retire. It is set at £268,275, which is 25% of the previous LTA.
The Lump Sum and Death Benefits Allowance
This is the maximum tax-free payment that can be made following someone’s death. It is set at £1,073,100, which is equal to the previous LTA.
If you think you have benefits impacted by the LTA changes, you can find out more information on our website at nationwidepensionfund.co.uk/limits-and-taxation
The Government will be increasing the Normal Minimum Pension Age (NMPA) from age 55 to age 57 from 6 April 2028. The NMPA is the earliest age that you can start taking your benefits from the Fund (apart from on the grounds of ill-health).
If you’re currently under 55 and are planning to take your benefits early, you might need to factor this change into your plans.
