People saving for retirement could face a shock if they put too much into their pension pot. The Lifetime Allowance could come into play and leave them with a bill on their savings.
This could put more people at risk of breaching the allowance in the coming years due to the impact of inflation.
First introduced in the 2006/07 tax year, the LTA was once much more generous.
It was first set at £1.5million.
In the following years it was then increased, eventually to an all-time high of £1.8million.
Annual Allowance
There is also a restriction on how much Britons can save for retirement in a given year, known as the Annual Allowance.
It is set at a much lower level, currently £40,000.
For those who have an income which fluctuates from year to year, such as self-employed people, this could be important to watch out for.
