Limits and taxation

The Lifetime Allowance is a limit of the total value of the pension savings you build up during your working life. From 6 April 2024, this is being abolished. 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.

The Annual Allowance is a limit on the amount of pension savings that you can build up that may qualify for tax relief. The period over which this is measured is known as the Pension Input Period (PIP) and runs from 6 April to 5 April.

The current Annual Allowance is £60,000. You can carry forward unused allowances from up to three previous years.

Please note your Annual Allowance may be reduced if one of the following statements are applicable to you:

• Your total annual taxable income in the relevant PIP plus any pension savings you make during the PIP exceeds £200,000
• You have chosen to take benefits from an authorised pension scheme as a taxed cash lump sum or
• You take income drawdown or a short-term annuity (or an annuity capable of reducing).

If contributions made by you or on your behalf into your Personal Account during a PIP exceed the Annual Allowance you may be liable to an additional tax charge.

If you exceed the Annual Allowance and a tax charge is due, you can ask for the Scheme to pay the charge on your behalf with it being deducted from your benefits. This is called Scheme Pays.

There are certain conditions that you must meet to use Scheme Pays*:

• Your Annual Allowance tax charge for the tax year is greater than £2,000;
• You have exceeded the Annual Allowance limit (currently £60,000)

If you meet these conditions and want to look into using Scheme Pays, please contact the Pensions Manager using the following email address hrstaffpensions@mandg.com.

*Where these conditions are not met, the Scheme may agree to a request on a voluntary basis.

The Trustee and Company have decided that the Scheme Pays facility can only be used in the DC Section if your resulting tax charge for any tax year exceeds £2,000 (whether you are applying for mandatory or voluntary Scheme Pays).

To make an application please complete a Scheme Pays Nomination Form. You can download a copy of the form from the forms page of the Document library.

Please be aware that if you have registered for fixed or enhanced protection from the Lifetime Allowance charge, joining the Scheme may invalidate your protection.