Farewell LTA: Transitioning into the new pension regime

Lump sum allowance will cap tax-free cash from pensions

clock • 4 min read

As the abolition of the lifetime allowance approaches Josh Croft explains how the new regime will work in practice...

With just a few months to go before the lifetime allowance (LTA) is abolished from the pension tax rules, we now have the full draft rules of how the new regime will work. Back in last year's Spring Budget the chancellor announced the intention to remove the LTA from April 2024. Since then we have had various drafts of legislation amending and creating new rules. Broadly speaking under the new rules, pensions from next tax year will only be tested against a limit when they are paid as a lump sum. The new lump sum allowance (LSA) will cap tax-free cash from pensions paid during some...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

We need to work together to tackle pension overconfidence

We need to work together to tackle pension overconfidence

'Clients may assume they're on the right track simply because they're paying into a pension'

Ahmed Bawa
clock 13 June 2025 • 4 min read
Pension freedoms have delivered flexibility in the last decade 'at a cost'

Pension freedoms have delivered flexibility in the last decade 'at a cost'

Consumers value choice but are aware of risk of running out of funds

Jasmine Urquhart
clock 12 June 2025 • 2 min read
Alex Cowan-Sanluis: 'Pension transfer sludge is real – I've seen it'

Alex Cowan-Sanluis: 'Pension transfer sludge is real – I've seen it'

'It became so frustrating that we spoke to the FCA'

Alex Cowan-Sanluis
clock 09 June 2025 • 4 min read