The lifetime allowance is a limit on the value of payouts from your pension schemes – whether lump sums or retirement income – that can be made without triggering an extra tax charge.

The lifetime allowance for most people is £1,055,000 in the tax year 2019-20.

It applies to the total of all the pensions you have, including the value of pensions promised through any defined benefit schemes you belong to, but excluding your State Pension.

The standard Lifetime Allowance is indexed annually in line with the Consumer Prices Index (CPI).