Lifetime allowance was the total amount of pension benefits you could build up from all registered pension schemes before you had to pay a tax charge.
All pension benefits that you built up counted towards your lifetime allowance. This includes any pensions outside the NHS Pension Scheme, apart from the State Pension.
The lifetime allowance was £1,073,100.
You can view lifetime allowance by year (Excel: 15KB) to see how the lifetime allowance has changed over time.
For more detail, view our guide to NHS Pensions and the lifetime allowance (PDF: 63KB).
Abolition of the lifetime allowance
The Chancellor of the Exchequer announced changes to the lifetime allowance on 15 March 2023 to support workforce retention.
The lifetime allowance charge was removed on 6 April 2023 from pensions and was abolished in April 2024 on lump sums.
What this means for you
If you retired on or after 6 April 2023, you did not pay a lifetime allowance charge on the pension benefits paid to you.
The maximum retirement lump sum, known as the pension commencement lump sum, you were able to take tax-free was £268,275, unless you had lifetime allowance protection from HMRC.
Risk of charge at retirement
If the value of your pension benefits was higher than the lifetime allowance, you may have had to pay a tax charge. This charge applied when you took your pension benefits.
You may be more likely to exceed the lifetime allowance if you have been a member of the scheme for a long time and had high earnings.
Working out the capital value of your pension benefits
To find out if the capital value of your pension benefits might have exceeded the lifetime allowance, you need to add both of these together:
- capital value of your NHS pension benefits
- value of all your other pension benefits
Follow this simple calculation to work out the capital value of your NHS pension benefits to be paid:
Capital value = (annual pension amount x 20) + lump sum
Lifetime allowance charge
The lifetime allowance charge is a form of tax that you and the scheme administrator are jointly liable.
The rate of tax charged depended on whether you take any benefits that exceed the lifetime allowance as a pension or a lump sum.
How the charge was applied
For benefits paid before 6 April 2024 the lifetime allowance charge was:
• 55% if you were taking the excess as a lump sum up to and including 5 April 2023, and your marginal rate from 6 April 2023 to 5 April 2024
• 25% of the capital value if you took it as a taxable pension income up to and including 5 April 2023
NHS Pensions paid your lifetime allowance charge to HMRC. We recovered the cost by permanently reducing your NHS pension benefits.
The reduction is based on a calculation that reflects life expectancy.
You can see how this works in our lifetime allowance charge examples (PDF: 273KB).
Effects of charge on dependant’s pensions
A children’s pension is never reduced.
We may reduce an adult dependant’s pension. This will depend on the value of the pension being paid.
We confirmed any reduction when we made the payment.
HMRC protections
Since the lifetime allowance was introduced, HMRC made different types of lifetime allowance protections available to members. These protections allowed you to take pension benefits above the lifetime allowance without paying a charge.
Individual Protection 2016
Applications for Individual protection 2016 to HMRC closed on 5 April 2025. If you need to update your application, use these documents to get more information and submit your forms.
Individual Protection 2016 factsheet (PDF: 89KB)Individual Protection 2016 valuation request form (Officer) (Word: 101KB)Individual Protection 2016 valuation request form (Practitioner) (Word: 91.5KB)
If you’re joining or rejoining the scheme because of auto enrolment, read the effect on Enhanced or Fixed Protection (PDF: 168KB).
Closure of the 1995/2008 Scheme and the move to the 2015 Scheme
From 1 April 2022 all new members of the NHS Pension Scheme are members of the 2015 Scheme. Active members of the 1995/2008 Scheme were automatically moved to the 2015 Scheme on 1 April 2022, as part of wider changes to public service pension schemes. You can read more about these changes.
Members with enhanced or fixed protection, who moved and contributed to the 2015 NHS Pension Scheme from the 1 April 2022, lost their protection on the day they started contributing to the 2015 Scheme. This is because HMRC do not allow these protections to continue once you start contributing to another registered pension scheme. The 2015 Scheme is registered separately with HMRC from the 1995/2008 Scheme.
More information about the impact of joining a new pension scheme on enhanced or fixed protection can be found in HMRC’s Pension Tax Manual (PTM). You can view these pages on the Government Archive:
If you have fixed protection, you should also check for benefit accrual to make sure your fixed protection is still valid. You can view PTM093500 and PTM176450.
You can find more information about financial advice on our website. Your employer and NHS Pensions are not authorised to provide financial advice.
If you've moved from the 1995/2008 Scheme to the 2015 Scheme and lost your enhanced or fixed protection
In 2015, the government made changes to most public service pension schemes, including the NHS Pension Scheme. These reforms did not apply to members closest to retirement. The Court of Appeal later found that this discriminated against younger members and the government is making changes to remove this age discrimination.
Who is affected
You may be affected by the changes if you:
• joined a public service pension scheme on or before 31 March 2012, and were a member on or after 1 April 2015
• left after 31 March 2012 but returned within 5 years
You can find out more about the changes and if you’re affected on our changes to public service pensions web hub.
What is happening to your pension benefits
If you’re affected, as part of the changes on 1 October 2023, any service you have in the 2015 Scheme between 1 April 2015 and the 31 March 2022 will be returned to the 1995/2008 Scheme.
This means if you previously had enhanced or fixed protection and lost this because you moved and started contributing to the 2015 Scheme, on application to HMRC this protection will no longer be treated as lost when your service up to 31 March 2022 is returned to the legacy scheme. This applies as long as:
- you have not continued contributing as a member of the 2015 Scheme from 1 April 2022
- you have not lost the protection due to another reason
If this applies to you, you should carefully consider your lifetime allowance position.
You can find more information about financial advice on this website. Your employer and NHS Pensions are not authorised to provide financial advice.
Losing enhanced or fixed protection
If you lose your enhanced or fixed protection as a result of your move to the 2015 Scheme, you are required to notify HMRC within 90 days of the loss taking place.
Previous HMRC protection arrangements
Applications for LTA protections have closed, however, HMRC may consider applications on appeal.
Fixed Protection 2012 (PDF: 133KB)Fixed Protection 2012 and Benefit Accrual (PDF: 115KB)Fixed Protection 2014 (PDF: 104KB)
Individual Protection 2014
Individual Protection 2014 factsheet (PDF: 53KB)Individual Protection 2014 valuation request form (Officer) (Word: 311KB)Individual Protection 2014 valuation request form (Practitioner) (Word: 87.6KB)
Fixed Protection 2016
Fixed Protection 2016 factsheet (PDF: 58KB)Loss of enhanced protection and fixed protection because of the 2015 NHS Pension Scheme (PDF: 98.9KB)
Financial advice
If you think lifetime allowance may have affected you, we recommend getting independent financial advice.
Under the Financial Services and Markets Act of 2000, all financial advisers have to decide whether to be ‘independent’ or ‘restricted’.
A financial adviser who is ‘independent’ can offer a range of financial services and products from across the entire market. A financial adviser who is ‘restricted’ can only offer the products from one or a series of companies.
Before you ask for advice, make sure you know which type of adviser you're dealing with. Most financial advisers will charge for their advice.