Fourth Delegated Legislation Committee

16 June 2026

Fourth Delegated Legislation Committee House of Commons

00:03 - 00:17
Speaker 1
Order.  Draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026.  I call the Minister, Minister Torsten Bell. 
00:17 - 02:02
Speaker 3
Thank you, Chair and honorable friends.  I beg to move that the committee considers the Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026.  Let me briefly take the committee through the background and the purpose of these regulations, which relate to the abolition of the pensions lifetime allowance.  At Spring Budget 2023, the previous government announced that it would abolish the lifetime allowance.  The Finance (No. 2) Act 2023 removed the lifetime allowance charge. 

The Finance Act 2024 removed the other elements of the lifetime allowance from the pension tax regime from the 6th of April 2024.  This was a significant task.  The entire pensions tax regime was structured around the existence of a lifetime allowance.  Many other aspects of the regime, such as the allowable pension and lump sum benefits, were calculated by reference to the lifetime allowance.  Additional regulations have then been needed to provide further administrative and technical detail. 

Since the Finance Act 2024 and the regulations that followed, HMRC has continued to work with industry representatives to ensure that the legislation operates correctly.  In doing so, HMRC has identified some further areas which do not operate as intended.  Chair, this statutory instrument simply modifies a number of areas of primary legislation and some areas of subordinate legislation purely to ensure the abolition of the lifetime allowance is delivered as originally intended.  These changes ensure the lump sum allowances work fairly and consistently, including treating overseas pensions in the same way as UK schemes and giving individuals flexibility to decide the order of multiple payments on the same day.  They also clarify the calculation of protections and enhancements so that the outcomes more closely reflect those achieved under the lifetime allowance. 

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