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 you take benefits, the aggregate value of all your pension funds and benefits will be tested against the LTA.

If your aggregate funds and benefits exceed the LTA, any funds you are crystallising may be liable to the lifetime allowance charge. This is also dependent on any transitional protection you may have.