The lifetime allowance (LTA) sets a ceiling on the total value of pension funds an individual can accumulate with tax relief.

The LTA is set every five years by a Treasury Order. There is no set formula for increases. However, it cannot decrease. At any point benefits are crystallised, the aggregate value of all your client’s pension funds and benefits will be tested against the LTA.

If the aggregate funds and benefits exceed the LTA the value of the excess may be liable to the lifetime allowance charge. This is also dependent on any transitional protection your client may have.