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Shares Magazine
15 January 2026
When the pensions lifetime allowance was abolished in 2024, it was widely seen as good news for people with larger pension pots. But it also created a bit of a myth; that age 75 no longer matters in the world of pensions.
It’s true that there is no lifetime allowance test at 75 to worry about, but it remains a key point where HMRC draws a line under certain tax advantages. Here’s why age 75 still deserves a place on your retirement radar.
1. Tax relief on what you pay in
If you’re a UK resident under age 75, you’ll receive income tax relief on your own pension contributions. This can be on up to 100% of your UK earnings, or £3,600 if lower.
Keep in mind that relevant UK earnings include payments like salary and bonuses before tax, but not property rental income, savings interest or dividends.
But pension rules still say tax relief must stop once you turn 75, so in practice most pension schemes just don’t accept new personal contributions after this.
If you’re still working past your 75th birthday, your employer can in theory still pay into your pension. They can benefit from tax relief on what is paid in, and you will benefit from a boost to your savings, but the contributions need to meet the tax rules, including being for the purposes of trade.
2. Impact on pension death benefits
There is still a ‘cliff edge’ that applies to pension death benefits. Your 75th birthday can make a big difference to how much your beneficiaries might receive from your pension.
If a pension holder dies before age 75, money left in their pension(s) can usually be passed on tax-free if the transfer to your beneficiaries happens within two years. On death at or after age 75, your beneficiaries will pay income tax at their marginal rate on money they withdraw from inherited pensions.
From 6 April 2027, pensions will also be included in people’s estate for inheritance tax. This could lead to high effective rates of tax for some beneficiaries.
3. Age 75 and tax-free cash
Although the pension rules don’t say you must take your tax-free cash before age 75, some older plans have some restrictions.
If you do decide to delay taking some of your tax-free lump until age 75 and then die before taking it, your previous tax-free entitlement is lost and anything paid to your beneficiaries from your unused pensions will be taxed at their own marginal rate.
If you turned age 75 before the lifetime allowance was abolished, check if you’re entitled to any more tax-free cash. The rules have been amended so that cash allowances are no longer reduced by the former age 75 lifetime allowance test.Â
It’s fair to say that the lifetime allowance means reaching 75 is no longer a question of being penalised for saving too much in a pension, but here are three tips if you’re approaching this milestone.
Check the rules of your pension scheme, particularly if anything changes at age 75.If you’ve still got pensions you haven’t fully accessed, check how much of your lump sum allowance you have left and consider withdrawing any remaining tax-free cash before age 75.Review who you’ve nominated as your pension beneficiary(s).
For many people, taking the time to plan before reaching this milestone can make a meaningful difference to how tax-efficient their retirement and estate planning turns out to be.Â
The best course of action for you will depend on your personal circumstances. It’s a complex area so please also consider taking financial advice to avoid any costly mistakes.