- Increasing numbers of pensions' values are breaching the lifetime allowance
- You can apply for lifetime allowance protection in certain circumstances
- It can still be worth contributing to pensions even if this means their value exceeds the lifetime allowance
I recently asked do-it-yourself (DIY) investment platforms what their customers' most common questions on self-invested personal pensions (Sipps) are. And one of the most common subjects was how to manage the pensions Lifetime Allowance (LTA) – despite this only affecting a relatively small number of pension savers.
This may be because increasing numbers of pension pots' values are exceeding the LTA – the amount you can build up in them without having to pay a penalty charge. This is because the pensions LTA has been reduced over the past decade from a peak of £1.8mn in 2012 and the current level of £1,073,100 is frozen until 2026.