This sum, which is set by the government, represents the maximum amount you can withdraw from a pension fund without being hit for additional penalty tax charges.

If the total amount you have saved exceeds this sum at the point you crystallise the fund (by, for example, making a withdrawal or reaching the age of 75) you will become liable for tax on the excess above the LTA at a rate of up to 55% for a lump sum withdrawal. For the tax year 2017/18 the LTA is £1m, rising to £1.03m for 2018/19.

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