Lifetime allowance

The lifetime allowance is the total capital value of all your pension arrangements, not including your state pension, pension credit, or any partner’s or dependant pension you may be entitled to, which you can build up without triggering a tax charge.

The lifetime allowance is set by HMRC, and the standard lifetime allowance is currently set at £1,073,100.
Unless you have protections, the maximum pension commencement lump sum is capped at 25% of your available lifetime allowance and cannot exceed £268,275 (£1,073,100 x 25%).

The Government has confirmed that no one will pay a lifetime allowance charge for the tax year 2023/2024 onwards. From April 2024, the lifetime allowance will be abolished entirely.