HMRC recently issued preliminary guidance in regard to the abolition of the pensions lifetime allowance.

At the Spring Budget, Chancellor Hunt announced that the lifetime allowance charge will be removed from 6 April 2023. The allowance will be fully abolished from the 2024/25 tax year via a future Finance Bill.

As a result of the abolition of the lifetime allowance, the maximum amount most members can take as a pension commencement lump sum will be frozen at £268,275, which is 25% of the current standard lifetime allowance of £1,073,100. However, members with a protected right to a higher pension commencement lump sum on 5 April 2023 will continue to be able to access this right.