Lifetime Allowance

The lifetime allowance applies to any pension savings you have in:

  • a registered pension scheme
  • an overseas pension scheme that qualifies for UK tax relief for either you or your employer on or after 5 April 2006

The lifetime allowance is currently £1,073,100 (2020-2021). Most people won't have to pay the lifetime allowance charge.

Please note: From April 2016 the lifetime allowance will reduce to £1 million. HMRC have prepared a factsheet which you might find useful.

The lifetime allowance applies even if you're in a pension scheme that you don't make payments into - for example if you're in a workplace pension that only your employer makes payments into.