Lifetime allowance

UK Pensions. The maximum amount of pension and/or lump sum available from a pension scheme that benefits from tax relief.

There is no limit on the amount of benefits that the pension scheme can pay out. However, if the pension scheme gives benefits of more than the lifetime allowance an extra tax charge is payable on the amount over the lifetime allowance. This tax charge is called the lifetime allowance charge.

See also

• Annual allowance
• Defined benefit pension scheme
• Earnings cap