Background

The Lifetime Allowance (LTA) is the maximum amount you can draw from your pension(s) in your lifetime without paying extra tax. Until the end of this tax year (April 2023/24) the standard LTA of £1,073,100 remains in place but the charge for exceeding the LTA is removed, with the allowance abolished entirely from April 2024.

Although in April 2023, the Chancellor committed to abolishing the LTA tax charge, a prospective Labour government has pledged to reintroduce this charge.

While this tax affected less than 1% of pensions nationally, it did impact on a number of NAHT members, primarily at headteacher and CEO level. 

NAHT’s Position

A discussion on any potential re-instatement was held at NAHT’s National Executive in June 2023. Following this, NAHT’s initial position is that, if the lifetime allowance (LTA) is re-introduced, the limit should be index-linked, to reflect rising inflation. This should significantly reduce the likelihood of any members being ‘caught’ under any new LTA and help to minimise the impact such a re-introduction might have on retention of some of our senior leaders.

Looking Ahead

As we move closer to an election period, NAHT will utilise this position as part of any election campaigning, which may suggest a change in the current abolishment of the LTA.