We’ve put together a summary of what’s changed in the 2024/25 tax year to help you understand any impact on you or your pension savings.

There are three main changes:

The Lifetime Allowance (LTA) is being replaced by the Lump Sum Allowance (LSA) and Lump Sum and Death Benefit Allowance (LSDBA), which will still control the amount of tax-free cash you can receive.

The lump sum allowance is limited to £268,275. It's the total amount of tax-free sums that you can receive during your lifetime, across all of your pension savings. It applies to you, unless you have a protected right to a higher lump sum allowance or transitional rules apply.

The lump sum and death benefit allowance is £1,073,100. It covers the tax-free sums under the lump sum allowance and certain death benefits and other lump sums that are payable tax-free, such as serious ill-health lump sums.

You will generally not be affected by the changes to Lifetime Allowance if your total pension value (excluding the State Pension) is less than £1,073,100. If you think you may be over the lump sum allowance limit or the lump sum and death benefit allowance, or close to it, you should understand that you may be liable for a tax charge and should seek financial advice. You can find a retirement adviser on the MoneyHelper website if you don’t already have an adviser.

Find out more here.

The National Insurance rate is now 8% based on an income of £12,570 to £50,270 a year, which is 2% less than last year.

If your income is under £12,570 or above £50,270, there are no changes to your National Insurance rate. It’s worth noting that the personal allowance – the amount of income most people can have without paying income tax – has not changed and remains at the same level of £12,570. If you do not fall into the Class 1 type of National Insurance or need further support can find more information on the MoneyHelper website.

The State Pension has increased by 8.5% compared to last year.

More than 12 million people currently receive the state pension. Those born between 6 October 1954 and 5 April 1960 start receiving their pension at the age of 66. But for people born after this date, the state pension age has increased to age 67. The State Pension age is likely to increase in the future, which is why it’s so important to save into your workplace pension. Find out more about the State Pension on the MoneyHelper website.

Please note that pension policies and regulations do change, so please check with official Government sources, like MoneyHelper, or speak to a regulated financial adviser. You can find a list of regulated advisers on the MoneyHelper website.