The lifetime allowance will be reduced to £1 million (previously £1.25 million) from 6 April 2016. The allowance will be indexed by inflation from 2018.
The annual allowance remains at £40,000.
From April 2016, the government will therefore change the tax rules to allow people who are already receiving income from an annuity to sell that income to a
third party, subject to agreement from their annuity provider.
The proceeds of the sale could then be taken directly or drawn down over a number of years, and would be taxed at their marginal rate, in the same way as those taking their pension after April 2015.
Previous changes to pensions
A reminder that, from April 2015, significant changes are happening to introduce more flexibility into how money can be drawn from pension pots.
You can find an outline of the new rules here.