Tax and your pension
Lump sum allowance
New lump sum allowances were introduced from 6 April 2024 to replace the lifetime allowance (LTA) that was in place from 2006.
There is no limit on the amount of pension you can receive but there is a limit on how much cash you can take from UK pensions before you have to pay extra tax.
In the LGPS, you can generally take up to 25% of the value of your benefits as a cash lump sum when your pension is first paid to you. Most members will not be affected because the maximum lump sum they can take is much lower than the new limits. If you have built up a large pension in the LGPS or a different scheme, the new limits may affect you.
If you have already been paid a pension or a lump sum from a UK pension scheme, you have already used up some of your lump sum allowance.
If you do exceed the limit, you will have to pay tax at your marginal rate.
Further information about lump sum limits and transitional protections can be found on the LGPS's Tax page.