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Abolition of the Lifetime Allowance
The lifetime allowance is the maximum amount of tax relievable pension savings an individual can benefit from over the course of their lifetime. Formerly pension savings in excess of the lifetime allowance were subject to a lifetime allowance tax charge, but since 06 April 2023 this tax charge has been removed and any pension savings worth more than the lifetime allowance will be taxed at an individual’s marginal rate.
The government may make additional changes to the taxation of pension savings when new legislation is introduced, effective from 6 April 2024. If you are considering taking your benefits after 6 April 2024 please note these changes and consider taking financial advice. These changes are similarly worth knowing about, and considering taking financial advice on, if you are considering taking your benefits before then.