Transitional tax-free amount certificates (TTFAC) and further pension savings

What this means for you

If you accessed your pension before 6 April 2024 but didn’t take the full 25% tax-free lump sum, you may now be able to take more tax-free cash.

A Transitional Tax-Free Amount Certificate (TTFAC) can help confirm how much tax-free entitlement you’ve already used and whether you can access more from remaining pension savings.

What’s changed

The Lifetime Allowance (LTA) was abolished from 5 April 2024 and replaced with new limits on tax-free benefits:

• Lump Sum Allowance (LSA): £268,275
• Lump Sum and Death Benefit Allowance (LSDBA): £1,073,100

These limits may be higher if you hold LTA protections.

Under the new rules, HMRC assumes you took 25% tax-free cash from any pension accessed before 6 April 2024, even if you actually took less.

Where a TTFAC can help

A TTFAC corrects this assumption by confirming the actual amount of tax-free cash you received.

This is particularly relevant if:

• you took benefits from the 1995 NHS Pension Scheme (which typically pays around 13% as a standard lump sum)
• you have remaining pension savings (such as a personal pension or 2015 NHS Pension)

Example:

A GP who accessed their 1995 NHS Pension before 6 April 2024 received an annual pension of £60,000 and a standard lump sum of £180,000. Their total LTA used totals £1,380,000, more than 100% of the new allowance. However, they only took £180,000 tax-free, below the new £268,275 limit. This GP could theoretically take more tax-free cash from any personal pensions (or from the 2015 NHS Pension) they may have accrued, but only if they apply for a TTFAC before drawing these pensions.

Existing protections and further savings

If you hold Lifetime Allowance protections such as:

• Enhanced Protection (EP)
• Fixed Protection 2014 or 2016 (FP2014 / FP2016)
• Individual Protection 2014 or 2016 (IP2014 / IP2016)

you may also benefit from higher allowances.

Importantly, rules have changed for Fixed and Enhanced Protection.

If your protection was:

• registered by 15 March 2023, and
• still valid on 6 April 2023

you can now make further pension contributions or accrue benefits without losing that protection.

This creates new planning opportunities, particularly for those who previously stopped pension saving.

What to consider

• A TTFAC must be applied for before accessing further pension benefits
• It can affect how much tax-free cash you can take in future
• The interaction with tax, protections and multiple pension schemes can be complex

Need help?

Understanding whether a TTFAC is right for you, and whether you can resume pension saving, will depend on your individual circumstances.

We support NHS professionals and other pension holders with navigating these changes. We can help you understand your position and work alongside specialist advisers where needed.

Get in touch with your usual Larking Gowen contact or email enquiry@larking-gowen.co.uk

Jan McLean