Since 2018 the LTA had been index linked and should continue to increase gradually over time. Increases are based on the Consumer Price Index (CPI) index I, from the previous September each year. However LTA increases between 2021/22 to 2025/26 have been frozen.

Is the pension lifetime allowance likely to increase?

The lifetime allowance link to the Consumer Price Index increase was announced at March Budget 2015 and confirmed at Summer Budget 2015. The lifetime allowance has increased in line with the Consumer Price Index increase for tax years 2018 to 2019, 2019 to 2020 and 2020 to 2021.

What is the lifetime allowance for 2021 2022?

THE pension lifetime allowance had been expected to rise in line with inflation, but instead has been frozen at its current level – at £1,073,100 – for 2021-22. Chancellor Rishi Sunak made the call in April's Budget and it is among a string of measures aimed at plugging the Covid blackhole in the country's finances.