There is no upper limit on benefits that can be provided by registered pension schemes, but there is a maximum accumulated capital value which if exceeded triggers a tax charge. The maximum capital value is called the Standard Lifetime Allowance (SLA) and the tax charge is called the Lifetime Allowance Charge (LAC). it is possible for client’s to have ‘protection’ that will allow a higher fund to be paid without a LAC.
If the client takes the excess fund as a lump sum, the LAC is 55%. If the excess fund is taken as an income, the LAC is 25% and the income will then be subject to income tax.
In 2023/24 the LAC was reduced to 0%
In 2024/25 the Lifetime Allowance will be abolished.
History of the Standard Lifetime Allowance (SLA) is below;
| TAX YEAR | SLA |
| 2023/24 | £1,073,100 |
| 2022/23 | £1,073,100 |
| 2021/22 | £1,073,100 |
| 2020/21 | £1,073,100 |
| 2019/20 | £1,055,000 |
| 2018/19 | £1,030,000 |
| 2017/18 | £1,000,000 |
| 2016/17 | £1,000,000 |
| 2015/16 | £1,250,000 |
| 2014/15 | £1,250,000 |
| 2013/14 | £1,500,000 |
| 2012/13 | £1,500,000 |
| 2011/12 | £1,800,000 |
| 2010/11 | £1,800,000 |
| 2009/10 | £1,750,000 |
| 2008/09 | £1,650,000 |
| 2007/08 | £1,600,000 |
| 2006/07 | £1,500,000 |