What is a benefit crystallisation event?
When you buy an annuity before 75, the amount of your pension you use and any tax-free cash you take will be measured against the pension lifetime allowance. This measurement is called a benefit crystallisation event (BCE).
Your pension could also be measured against the lifetime allowance at other times. For example, when you move pension money into drawdown, when you take a lump sum and/or when you turn 75.
If the money you've used for your annuity takes you over the lifetime allowance, there will be a tax charge. The lifetime allowance is currently set at £1,055,000 (2019/20).