Lifetime Allowance

The LTA is the total amount you can build up from all your pension savings in your lifetime without incurring a tax charge. The LTA from 6th April 2018 is £1,030,000.

Exceeding the Lifetime Allowance

If you are over the limit, tax on the excess is charged at:

    • 25% on your pension in excess of your personal LTA.
    • 55% on your lump sum

However, the tax free lump sum is the lower of 25% of the:

    • remaining capital value or,
    • standard LTA based on:
      • £1.8m for Fixed Protection
      • £1.5m for Fixed Protection 2014, Primary Protection and Enhanced Protection;
      • £1.25m for Fixed Protection 2016;
      • The value of your LTA as at 5 April 2014 for Individual Protection 2014;
      • The value of your LTA as at 5 April 2016 for Individual Protection 2016.

The pension commencement lump sum automatically crystallises before the pension therefore using any available LTA first.

For changes to the Lifetime Allowance from 6 April 2016 please see 2016/17 LTA Changes.


Link to Scottish Government Website