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Document What is Lifetime Allowance (LTA)?

Your Lifetime Allowance (LTA) is the total amount that you can build up from all your pension savings in your lifetime without incurring a tax charge.

With the exception of your State Pension, all pension benefits that you have accumulated - both within and outside of the NHS Pension Scheme - will use up a percentage of your LTA. This percentage is normally calculated at the point at which you take your pension benefits, also known as the crystallisation event.

Please note: Further crystallisation events will take place each time a pension is revised through a sub-award using the relevant LTA at the time the pension is revalued.

The percentage is calculated on the actual benefits that are put into payment. For example, if you retire on Actuarially Reduced Early Retirement (ARER), the LTA used will be calculated on the actuarially reduced benefits rather than the unreduced benefits.

When you claim your NHS Pension Scheme benefits, your award letter will confirm the percentage of the LTA that your NHS Pension benefits have used.

The standard Lifetime Allowance (LTA) has increased to £1.055 million from 6 April 2019. Without LTA protection, NHS pension benefits at retirement will exceed a LTA of £1.055 million at the following pre-commutation pension amounts:

  • 1995 Section - £45,869
     
  • 2008 Section - £52,750
     
  • 2015 Scheme - £52,750

For more information regarding the Lifetime Allowance and its impact on your pension benefits, please the NHS Pensions website.

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