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What is the lifetime allowance?

The lifetime allowance is the total value of all pension benefits you can have without triggering an excess benefits tax charge. If the value of your pension benefits when you draw them (not including any state retirement pension, pension credit or any partner's or dependant's pension you may be entitled to) is more than the lifetime allowance, or more than any protections you may have, you will have to pay tax on the excess benefits. The lifetime allowance is set by HM Treasury and is currently £1million; it covers any pension benefits you may have in all tax-registered pension arrangements - not just our Scheme.

For pensions that start to be drawn on or after 6 April 2006, the value of those pension benefits, for the purposes of the lifetime allowance, is calculated by multiplying your annual pension by 20 and adding any lump sum you draw from the pension scheme (including any lump sum drawn from an in-house AVC fund).

The lifetime allowance quick check tool

You can use the quick check tool to:
  • estimate the total value of your Scheme benefits (including an in-house AVC fund)
  • estimate how much of the current lifetime allowance your Scheme benefits would use
  • check if an excess tax charge is likely to be payable in respect of your Scheme benefits

The check tool does not take into account:
  • any pension benefits that are already being paid to you (these are valued differently)
  • any pension benefits that you hold with other pension schemes
  • any lifetime allowance protection that you may hold

Your Details
Yearly Pension £ field help
Automatic Lump Sum £ field help
Value of AVC Fund field help
Results
Total Value of Pension Benefits £
Percentage of Standard Lifetime Allowance used %

Yearly Pension

Enter the amount of yearly pension payable at the date you wish to test your lifetime allowance. You will find the yearly pension you have built up to 31 March of the current year on your annual statement in addition to the pension payable at your normal pension age if you keep contributing to the scheme

Automatic Lump Sum

Enter the amount of automatic lump sum payable in respect of your membership up to 1 April 2009. This figure will be shown on your annual benefit statement if applicable. If you joined the LGPS (NI) after 1 April 2009 you will not receive any automatic lump sum but you will be able to give up pension for lump sum when you draw your pension.

Value of AVC fund

Enter the value of your AVC fund, if applicable. AVCs are extra payments to increase your future benefits. You can find the value of your AVC fund by either logging into your online account with your AVC provider or on your latest annual statement.