You can use this tool to estimate how much of the standard lifetime allowance your LGPS pension savings will use. The lifetime allowance is the total value of all pension benefits you can have without having to pay extra tax.
Each time you take payment of a pension, you use up a percentage of the lifetime allowance. The lifetime allowance is set by the Government and is currently £1,073,100. It covers pensions in all tax-registered pension schemes – not just the LGPS. However, it does not cover the state pension, a pension you have been awarded as part of a divorce or a dependents’ pension.
How this tool works
Enter the value of your pension benefits at the date you want to test your lifetime allowance. The tool will tell you, as a percentage, how much of the current lifetime allowance your benefits will use.
You can enter the current value of your pension benefits or the value at a future point in time. Your annual benefit statement will show the value at 31 March in the current year; it may also provide an estimate at your normal pension age. If you pay AVCs, you can find out the fund value by logging into your online account with your AVC provider, or looking at the latest statement.
The lifetime allowance is calculated by multiplying your yearly pension by 20 and adding any lump sum you take from the scheme, including a lump sum from AVCs.
The tool will not take into account:
- any pension that is already being paid to you or any pension you have with other pension schemes
- any lifetime allowance protection you hold – if you applied for protection when the lifetime allowance was reduced in 2012, 2014 and 2016
- the tapered annual allowance which applies to high earners
- any future changes to the lifetime allowance limit.
See the Tax section for more information on these protections and the lifetime allowance generally. - Opens in a new browser window