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If you joined Lloyds Banking Group after 1 July 2010, you’ll have been automatically enrolled in Your Tomorrow.

If you’re still unsure, or if you’re a dependant or representative who needs to get in touch, contact WTW (the scheme administrator) at 01737 227 522.


Tax information

The Annual Allowance

The Annual Allowance (AA) is the total amount of pension savings that a UK taxpayer can build up each tax year without incurring a tax penalty. This includes both your contributions and Company contributions.

The AA is measured over the Scheme's Pension Input Period (PIP). The Scheme's PIP is 6 April - 5 April, in line with the UK tax year.

Since 6 April 2023 the AA has been £60,000. However, if you think that you're going to exceed it, you can carry forward any unused annual allowance from the three previous tax years.

Annual Allowance changes

The maximum Annual Allowance (AA) was £40,000 from 6 April 2016 until 5 April 2023. It was then increased to £60,000 in 2023/24. However, in certain situations your AA may be reduced.

Tapered Annual Allowance (TAA)

The Tapered Annual Allowance (TAA) applies to members with a 'threshold' income of over £200,000 and an 'adjusted' income of over £260,000.

Your threshold income is your total income from all sources. As well as your salary, this would also include for example: rental or investment income.

Your adjusted income is your threshold income plus any pension contributions you and your employer have made into defined contribution schemes and the increase in any defined benefit pension and AVCs paid during the Pension Input Period. It doesn't include any money you’ve given to charity.

If your threshold income is less than £200,000 OR your adjusted income is £260,000 or less, your AA won’t change.

If your adjusted income exceeds £260,000 AND your threshold income is over £200,000, your AA will be less than £60,000. In this situation, for every £2 that your adjusted income exceeds £260,000, your AA will reduce by £1. The minimum AA will be £10,000.

The examples below show how this calculation may work.

Example One Example Two
Income before pension contributions (threshold income) £210,000 £210,000
All pension contributions £60,000 £55,000
Charitable donations £1,000 £0
Adjusted income £269,000 £265,000
Adjusted income exceeds £260,000 by: £9,000 £5,000
Reduction in AA (50% of adjusted income above £260,000) £4,500 £2,500
AA £55,500 £57,500

You may be able to carry forward any unused AA from the last three tax years to increase your AA for the current tax year. Our online calculator will also help you understand how the carry forward provisions work.

This is only a summary of the changes.

Money Purchase Annual Allowance (MPAA)

The Money Purchase Annual Allowance (MPAA) applies to members who choose to take some of their defined contribution (DC) benefits flexibly, while still making contributions into a DC scheme. The MPAA was increased from £4,000 to £10,000 with effect from 6 April 2023. This means that only the first £10,000 of contributions into a DC scheme of the total £60,000 AA will receive tax relief.

If members take some of their DC benefits flexibly but continue to accrue benefits in one of the Group's Defined Benefit (DB) pension schemes, the full AA of £60,000 still applies.

If members take some of their DC benefits flexibly but continue to accrue benefits in a DB scheme and make contributions into a DC scheme, the MPAA will apply to the DC benefits, and the remaining AA will apply to the DB benefits.

Visit GOV.UK to find out more.

The Lifetime Allowance

The Lifetime Allowance (LTA) is being abolished, meaning there is no longer a cap on the amount of pension benefits you can build up without incurring a tax charge. The Lifetime Allowance charge will no longer apply on:

  • lump sums above £1,073,100
  • amounts above the previous lifetime allowance taken as income

However, the amount you can take as a tax-free lump sum will remain capped at £268,275.

Find out more

For more information, visit the GOV.UK tax on your private pension page.

It's your responsibility to check your benefits and ensure you remain within the government limits. If you’re impacted by the changes but unsure what action to take, you should take independent financial advice. You can find an adviser with Unbiased


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