The LTA is the maximum value of pension and other retirement benefits (excluding any State Pension) which can be built up over a lifetime before an additional charge needs to be paid.
In the tax year 2023/24, the LTA for most people is £1,073,000.
At the 2023 Budget, the Government announced that the Lifetime Allowance would be abolished from 2024/25 onwards. For 2023/24, the Lifetime Allowance is still in place and some benefits are still restricted by Lifetime Allowance availability. However, the Government has removed any Lifetime Allowance charges for the 2023/24 tax year. This means benefits in excess of the Lifetime Allowance will usually be subject to income tax at marginal rate.
You can receive tax relief on pension savings (excluding the State Pension) that are built up in each tax year up to a limit known as the Annual Allowance. If you contribute more or your pension builds up faster than the AA allows, you’ll have to pay a tax charge.
The AA doesn’t apply to your pension in the M&S Pension Scheme as you can no longer build up extra benefits in the Scheme, but you may want to know more about it when thinking about building up pension savings elsewhere. You can find out more about the Annual Allowance on the MoneyHelper website.
Most members are unlikely to exceed these allowances. However, if you think you might be affected you should think about:
- Contacting the Pensions Administration Team to find out how your current level of benefits in the Scheme compares to the LTA
- Speaking to an Independent Financial Adviser; and/or
- Visiting the MoneyHelper
website for more information on any protection that may be available.
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