Limit to 25% tax free lump sum

NOVAMET21

Hi
Is there a maximum amount that is allowed for 25% tax free lump sum?

HappyHarry

Yes - 25% of the lifetime allowance of £1.073.100.

NOVAMET21

HappyHarry said:

Yes - 25% of the lifetime allowance of £1.073.100.

Ah so one could take out circa 250k tax free.

What happens after 1,073,100?
Can we not put more into pension after this allowance or do we get taxed when contributing into pensions after this allowance?

Pat38493

NOVAMET21 said:

HappyHarry said:

Yes - 25% of the lifetime allowance of £1.073.100.

Ah so one could take out circa 250k tax free.

What happens after 1,073,100?
Can we not put more into pension after this allowance or do we get taxed when contributing into pensions after this allowance?

You can carry on putting in but you it will be taxed additional LTA tax on the way out at either 25% or 55% (on top of any income tax due).

In a way it's more of a limit on what you can take out than what you can put in, but as with all things pensions it's pretty complicated.  Lots of other threads about it here and articles on internet search of you want more details.

If you are in danger of exceeding LTA you may want to take financial advice to see how to manage the situation - it's not necessarily a given that you should stop paying in as this could still be your least worst option depending on your personal cirumstances as far as I understand it.

Albermarle

NOVAMET21 said:

HappyHarry said:

Yes - 25% of the lifetime allowance of £1.073.100.

Ah so one could take out circa 250k tax free.

What happens after 1,073,100?
Can we not put more into pension after this allowance or do we get taxed when contributing into pensions after this allowance?

 With a Million quid in play you need to, as already suggested,  do some research on the Lifetime Allowance ( LTA) .Or get some financial advice .