The Lifetime Allowance

As of the 2023/24 tax year, the UK government abolished the lifetime allowance charge, meaning individuals no longer face penalties for exceeding the LTA. However, the LTA still exists as a reference point for how much an individual can accumulate in their pension before triggering certain tax implications. The extra tax charge for going over the lifetime allowance (the total value of pension benefits, other than any State pension, you can build up free of tax) no longer applies. Instead, you would pay normal income tax at your highest rate on any excess.