Pension savers can keep protected tax-free cash, HMRC confirms

Comes after abolition of LTA in Budget with tax-free cash limit

Jenna Brown
clock • 2 min read

Pension savers who previously registered for lifetime allowance (LTA) protection are entitled to keep their higher tax-free cash amount, HM Revenue & Customs (HMRC) has confirmed.

It comes after the LTA was abolished in the Budget on 15 March with a cap of £268,275 imposed on tax-free cash. However, rules for people with enhanced or fixed protection laid out in Budget documents state protection is lost if contributions are paid in, or benefits accrue. Provider AJ Bell explained that the rules also apply if the person becomes a member of a new pension arrangement, or make or receive certain types of pension transfer. But the revenue has now confirmed that provided the pension saver registered for their protections before 15 March 2023 they can effectively ign...

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