Skip Header

Replacement of the lifetime allowance

The legislation that replaced the lifetime allowance framework became effective on 6 April 2024. You’ll find more information on the new rules and transitional arrangements below.

An overview of the lifetime allowance replacement legislation

The pension lifetime allowance is no more and three new allowances are now in place. In just 10 minutes, Paul Squirrell runs through these allowances, how they work and the payments that are tested against them. He also covers off the transitional arrangements and which clients may need to take action to ensure they are not disadvantaged by the new rules.

10-minute watch
Video Transcript

Financial planning considerations for 2024/25 and the LTA replacement regime

In the Spring Budget last year, a number of pension allowances were increased. However, the real ‘game changer’ in terms of saving for retirement was the abolition of the lifetime allowance. In this webinar, Paul Squirrell explains why the door is now wide open for pension savings and covers all the new allowances and transitional arrangements. He also looks at saving outside of a pension, considering ISAs, bonds and collectives.

44-minute watch

Video chapters - navigate easily to your area of interest

00:00 - Welcome and introduction 
01:04 - Overview of the changes to pension legislation 
06:53 - The lump sum and death benefit allowance 
11:02 - Beneficiary’s drawdown and pension death benefits 
15:51 - Transitional arrangements and the transitional tax free amount certificate 
26:08 - Protected tax-free cash 
31:44 - The overseas transfer allowance 
33:01 - The new legislation and accessing benefits 
35:32 - Potential further legislation changes under a new government 
37:39 - Changes to ISAs
39:12 - Bonds versus collectives 
42:22 - Key takeaways

Video transcript

The LTA replacement regime explained

The lifetime allowance (LTA) replacement regime has seen the introduction of three new allowances. The changes are good news for clients saving for their retirement but there is lots of detail to consider as we enter into the new tax year. Paul Squirrell examines the new rules and what they mean for clients.

5-min read
None
Calculating amount

Transitional tax-free amount certificates

Where clients accessed pension savings prior to 6 April 2024 and so used part or all of their lifetime allowance, the new lump sum allowance and lump sum and death benefit allowance are reduced by a “default” calculation. However, individuals have the option to apply for a “transitional tax-free amount certificate” where this would provide them with additional allowances.

Article: 5-min read

Guide: Completing the TTFAC information request Form: TTFAC information request

Update: Replacement of the lifetime allowance

The pension lifetime allowance (LTA) has now been abolished and replaced with a new framework. In this postcard, Paul Squirrell summarises the three new allowances that were introduced on 6 April 2024 and explains the transitional arrangements that have been put in place. Following the issue of PSN155, it also confirms the latest guidance on how to apply for a transitional tax-free amount certificate.

Download now
None
None

Continuing Professional Development

Please use this form to record any learning and development activities you have undertaken.

Download now

Technical matters

Pensions, retirement and tax planning

Pensions and divorce, death benefits, allowances and much more.

Retirement and pensions training

46 short retirement videos, totalling over five hours of learning.