Regulations come into force on 18 November 2024

The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 came into force on 18 November 2024, the Treasury has confirmed. The regulations were made on 7 October 2024 and laid before the House of Commons on 9 October 2024¹. The amendments they make have effect for the tax year 2024-25 and subsequent tax years¹.

The regulations replace references to the "standard lifetime allowance" with the "lump sum and death benefit allowance" in the Income Tax (Earnings and Pensions) Act 2003¹. They also raise one figure in the legislation from £4,000 to £10,000¹. The Treasury made the regulations under powers in paragraphs 133 and 134 of Schedule 9 to the Finance Act 2024¹.

For people with protection from earlier lifetime allowance rules, the regulations set out specific figures. Under primary protection, the individual's lump sum allowance is treated as £375,000 and their protected lump sum and death benefit allowance is £1,800,000¹. Under enhanced protection, the protected lump sum and death benefit allowance is £1,800,000, and the regulations also refer to a figure of £1,500,000 and a lump sum allowance of £450,000 in certain cases¹. Other provisions refer to a lump sum allowance of £312,500 and a protected lump sum and death benefit allowance of £1,250,000¹. The regulations also substitute £1,073,100 for £1,000,000 in one provision, and replace £268,275 with £375,000 in section 637P¹.

The regulations include time limits for scheme administrators. A certificate must be provided before the end of 90 days beginning with the day the relevant person receives it, and a lump sum must be paid before the end of two years beginning with the day the scheme administrator first knew of the individual's death, or the day they could first reasonably have been expected to have known of it, whichever is earlier¹.

Why it matters for households

The regulations affect people with registered pension schemes who take lump sums or who have protection from the lifetime allowance regime. From the 2024-25 tax year, the allowances that cap tax-free lump sums and death benefits are set out in the new lump sum and death benefit allowance framework rather than the lifetime allowance¹. For those with primary or enhanced protection, the regulations fix the protected amounts that apply to their circumstances, including a protected lump sum and death benefit allowance of £1,800,000 in the cases described¹. Scheme administrators also face deadlines for certificates and payments, which affect how quickly death benefits can be paid¹.

What happens next

The regulations are in force and the amendments apply from the 2024-25 tax year¹. A correction slip dated 18 November 2024 is listed alongside the original version of the instrument¹. No further commencement dates are set out in the regulations beyond 18 November 2024¹.