Published: 21 June 2024
Lifetime Allowance (LTA) - Removed from 6 April 2024
The Government have introduced two new limits to replace the LTA from 6 April 2024. Most members will not be affected by the new limits and if you hold a valid LTA protection, the new limits are increased in accordance with that protection.
- The 'lump sum allowance' (LSA), with a limit of £268,275. This will consider the amount of pension commencement lump sum (PCLS), commonly known as taxfree cash, and any uncrystallised funds pension lump sum (UFPLS) taken.
- The 'lump sum and death benefit allowance' (LSDBA), with a limit of £1,073,100. This will consider the PCLS, UFPLS, serious ill health lump sums, and authorised lump sum death benefits paid.
Any lump sum exceeding the LSA or LSDBA limit will be subject to tax. Please note that while an UFPLS may be available from other pension providers, this is not an option available in the Local Government Pension Scheme (LGPS).
Overseas Transfer Allowance
The government will also be introducing the 'overseas transfer allowance' (OTA), with a limit of £1,073,100. The OTA considers the total transfer amounts to a Qualifying Recognised Overseas Pension Scheme (QROPS). If it is exceeded, the excess will be subject to tax.
Individuals can still apply for Fixed Protection 2016 and Individual Protection 2016 up until 5 April 2025. After this date it will not be possible to apply for either protection.