What is the maximum lifetime allowance for pension schemes?

The maximum lifetime allowance for pension schemes is £1,073,100. This figure represents the total amount of funds that can be accumulated in pension schemes without incurring an additional tax charge when benefits are taken. The lifetime allowance is a critical consideration for individuals planning their retirement savings, as exceeding this threshold can result in a tax penalty on the excess amount.

Changes to the lifetime allowance can occur over time due to government policy decisions and budget announcements, but as of the latest updates prior to October 2023, £1,073,100 is the correct figure. This allowance is indexed to inflation, meaning it may be adjusted in future years to maintain its value in real terms, but it is essential for individuals to monitor these changes to manage their pension savings effectively.