Draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026

The Committee consisted of the following Members:

Chair: † Pete Wishart

Ahmed, Dr Zubir (Glasgow South West) (Lab)

† Barros Curtis, Mr Alex (Cardiff West) (Lab)

† Bedford, Mr Peter (Mid Leicestershire) (Con)

† Bell, Torsten (Parliamentary Secretary to the Treasury)

† Cooper, Dr Beccy (Worthing West) (Lab)

† Cooper, Daisy (St Albans) (LD)

Darling, Steve (Torbay) (LD)

† Dodds, Anneliese (Oxford East) (Lab/Co op)

† Dollimore, Helena (Hastings and Rye) (Lab/Co op)

† Ferguson, Mark (Gateshead Central and Whickham) (Lab)

† Garnier, Mark (Wyre Forest) (Con)

† Hoare, Simon (North Dorset) (Con)

† Paffey, Darren (Southampton Itchen) (Lab)

† Smith, Rebecca (South West Devon) (Con)

† Swallow, Peter (Bracknell) (Lab)

† Taylor, Rachel (North Warwickshire and Bedworth) (Lab)

† Trickett, Jon (Normanton and Hemsworth) (Lab)

Ian Bradshaw, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Tuesday 16 June 2026

[Pete Wishart in the Chair]

Draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026

I beg to move, That the Committee has considered the draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026.

I will briefly take the Committee through the background and purpose of these draft regulations, which relate to the abolition of the pensions lifetime allowance. At the 2023 spring Budget, the previous Government announced that they 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 6 April 2024. That was a significant task; the entire pensions tax regime was structured around the existence of a lifetime allowance, and many other aspects of the regime, such as allowable pension and lump sum benefits, were calculated with reference to the lifetime allowance. Additional regulations have thus been needed to provide further administrative and technical detail.

Since the Finance Act 2024 and the regulations that followed, His Majesty’s Revenue and Customs has continued to work with industry representatives to ensure that the legislation operates correctly. In doing so, HMRC has identified further areas that do not operate as intended. This statutory instrument simply modifies a number of areas of primary legislation and some areas of subordinate legislation purely to ensure that the abolition of the lifetime allowance is delivered as originally intended.

Those changes ensure that 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. Finally, they introduce targeted technical fixes and improved reporting rules to support accurate administration for the post lifetime allowance regime. The draft regulations are not a change in policy but make the further technical and consequential amendments necessary to ensure that pensions tax legislation can operate as intended following the abolition of the lifetime allowance.

Most of these changes will take effect from 6 April 2024 —in other words, they will apply retrospectively—when the lifetime allowance was abolished, although a small number of amendments will come into effect only from the date that the regulations come into force. The regulations have been made by the Treasury by exercising the powers conferred by paragraph 134 of schedule 9 of the Finance Act 2024. I therefore commend the instrument to the Committee.

I was going to bang on with a very long and intelligent speech, but in the interests of brevity and keeping everybody happy, I will not. I am delighted that the Minister is introducing legislation relating to the glorious regime of the strong and stable Conservative Government of 2020 and the 2023 Budget. This policy was slightly bonkers. We need to do everything we can to encourage people to save and not put a cap on their savings. I am tempted to go on about salary sacrifice, but I will spare the Minister the embarrassment of reminding him about that. We will certainly not oppose these regulations.

I have nothing further to add.

Question put and agreed to.

Committee rose.