How to Calculate Defined Benefit Pension Value for Lifetime Allowance

In the UK, retirement planning is a crucial aspect of financial security, and understanding how defined benefit pensions are valued for lifetime allowance purposes is essential. A defined benefit pension, often referred to as a final salary pension, promises a specific income after retirement, based on factors like salary history and duration of employment. The Lifetime Allowance (LTA) is a limit on the amount of pension benefit that can be drawn from pension schemes—either lump sums or retirement income—without triggering an extra tax charge.