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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 for most people is £1,073,100 and is expected to stay at this level until April 2026.

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