Lifetime allowance

From 6 April 2018, the pension lifetime allowance will increase to £1,030,000. This is an increase of 3%, in line with the current rate of inflation (according to the Consumer Prices Index, or CPI). Going forward the pensions annual allowance will continue to rise, in line with CPI, so we could see a healthy lifetime allowance in years to come.

The government has been slowly reducing the allowance, stopping in 2016 at £1m, so this is good news for those saving into a pension.

The lifetime allowance stipulates how much you can save in your lifetime, without incurring any extra tax charges (sometimes as high as 55%). Therefore, if you're close to the limit of the current allowance you may like to think about applying for pension protection. These can change from year to year, depending on changes made and details of the current pension allowance protections can be found on HMRC's website. 

Published on 06/12/2017