Limits and taxation
From 6 April 2024, the Lifetime Allowance (LTA) which sets the total value of all the pension savings you can build up before having to pay extra tax, is being abolished. The limit of cash, members can take will remain the same. From 6 April 2023, the LTA charge has been removed, so there will be no additional tax charge from this date. The amount of tax-free lump sum you can take is 25% of your total pension savings up to a maximum of 25% of the standard lifetime allowance. Remember, you need to take account of all pension benefits you build up, not just those in the Nationwide Pension Fund.
The Annual Allowance
The Annual Allowance is a limit on the amount of pension savings that you can build up that may qualify for tax relief, in any one tax year. There are no active members contributing to the Nationwide Pension Fund and Annual Allowance does not affect your previous pension contributions at NPF.
The Lifetime Allowance
The Lifetime Allowance is a limit on the total value of the pension savings, that you can build up during your working life in the Fund, and any other registered pension scheme. This limit applicable from 6 April 2021 is £1,073,100 and has been frozen at this level until the 2025/26 tax year. You may be subject to an additional tax charge if the value of all your pension benefits exceeds the Lifetime Allowance.
Further information on either the Annual Allowance or Lifetime Allowance can be found by visiting: