Get to know the DB Stakeholder Pension Plan

Pension allowances

There's a limit to the amount that can be paid into your pension plans each tax year without paying a tax charge - for most people this is normally 100% of your earnings, capped at £60,000. But in some circumstances it could be lower.

Lifetime allowance

Up until 5 April 2024 the Lifetime Allowance was the maximum amount of pension savings you were allowed to build up during your lifetime and take some of the benefits tax-free.

The limit for the 2023/24 tax year was £1,073,100 but could be higher if you are registered for any form of Lifetime Allowance Protection.

From 6 April 2024 onwards the Lifetime Allowance was replaced with limits on the tax-free benefits instead.

It’s important that you understand how these changes may affect your retirement planning.

Lump Sum Allowance and Lump Sum and Death Benefit Allowance

From 6 April 2024 onwards HMRC have placed limits on the amount of tax-free benefits that can be taken from pension schemes both during your lifetime and on your death.

The standard Lump Sum Allowance is £268,275 and the standard Lump Sum and Death Benefit Allowance is £1,073,100. These allowances reduce each time you take benefits.

If you hold one or more of the Lifetime Allowance Protections given by HMRC then you will be entitled to higher allowances that reflect this.

We’ve created Questions and Answers to help explain the changes and you can visit the HMRC gov.uk/tax-on-your-private-pension.

These allowances aren't an issue for most people, but it's a good idea to check. For more information download our Guide to tax relief, limits and your pension (PDF 359KB).[[Allowances extra]]