The Lifetime Allowance (LTA)
The requirement to pay a Lifetime Allowance tax charge in respect of any pension benefits above the Lifetime Allowance (LTA) was removed from April 2023.
Please visit the Government’s website for the latest LTA updates.
Working out the value of your BA pension
The LTA was introduced in April 2006. Pensions which commenced before 6 April 2006 were not required to be tested against the LTA but the value of any pensions in payment must be taken into account if you draw any other pension or AVC benefits at a future date.
The value to be tested against the LTA is worked out by multiplying the gross (i.e. before tax is deducted) yearly rate of the pension you are currently receiving (on the date you are due to start receiving your remaining benefits) by 25. Then divide this by the current LTA and multiply by 100 to work out the percentage of your LTA you have used up.
If you will have drawn any other pension benefits between 6 April 2006 and the date you eventually draw your remaining benefits, the assessment will have been carried out at the time of drawing your other pension benefits.