What’s a ‘Benefit Crystallisation Event’ (BCE)?


This term refers to a test that’s carried out whenever you take cash or income out of your pension pot. Or if you haven’t accessed it by the age of 75, the test will happen then.

All the test does is check whether you’ve exceeded your lifetime allowance (which is a limit to how much you can save into your pensions – the maximum for the current tax year is £1,073,100).

And if you’ve exceeded the lifetime allowance limit, the BCE test makes sure you get the appropriate tax charge.

Please note that as part of the Spring 2023 budget, the government announced that from 6 April 2023, the tax charge if you go over the lifetime allowance (known as the lifetime allowance charge), will no longer apply. The government has also stated that they intend to to change the law and abolish the lifetime allowance altogether from 6 April 2024.

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