Annual allowance

The annual allowance, which is set by HM Revenue and Customs (HMRC), is the amount by which the value of your pension benefits may increase in any one year without you having to pay a tax charge.

The assessment covers any pension benefits you may have in any tax-registered pension arrangements where you have been a contributing member of the scheme during the tax year.

You will usually only have an annual allowance tax charge if the value of the pension growth in a tax year is more than the annual allowance limit.  For 2022/2023 the annual allowance was £40,000.  For 2023/2024 the annual allowance will be £60,000.  For high earners the allowance may be lower.   

There is also a three year carry forward which allows you to carry forward unused annual allowance from the last three years. 

Our annual allowance factsheet (PDF 229KB) has more information about the annual allowance,

You can also visit the national LGPS member website to watch a short video about annual allowance.

 

 

Lifetime allowance

The lifetime allowance (LTA) is set by HMRC and is the total value of all pension benefits a person can have without triggering an excess tax charge. The LTA is currently £1,073,100.

Changes to the LTA were announced in the 2023 Spring Budget.  Nobody will now face an LTA charge for 2023/2024 onwards.  From April 2024, the LTA will be abolished. 

More information is available on the national website for LGPS members.  

 

If you have any questions about the annual or lifetime allowance, please contact the pension fund.