Since 6 April 2006 the government has restricted the tax-breaks on pensions by applying a ‘lifetime allowance’ (LTA). If the combined value of your pensions exceeds this allowance you could face tax charges you weren’t anticipating.
Speak to our experts to find out IF you are likely to exceed the lifetime allowance and what you can do to mitigate this.
Who is responsible for checking LTA?
Neither the tax authorities, nor the pension providers, are checking the value of your pension against the LTA on a daily basis! So, don’t expect a warning letter as you approach your limit! It is your responsibility to check!
Pension lifetime Allowance Protection
Since 2006 the lifetime allowance has been an area for our specialist pension advisers where we have considerably success. We can help model the likelihood of you incurring tax and we can then advise on the best approach for you.
How do I know if I have exceeded my LTA?
This isn’t always straight forward to establish as the method used to determine the value of your pensions depends upon the type of pension arrangements you have and whether they are paying out yet or not.
Is it worth exceeding the lifetime allowance?
It is important to get independent, financial advice by a authorised and regulated adviser. Pensions Advice UK, can put you in touch with an adviser specialising in Lifetime Allowance issues.
You could pay a 55% tax charge
The overall cap on pension savings could catch out those with modest incomes! Royal London shows that more than 1.5 million people are on track to exceed the lifetime allowance!
Lots of people change jobs several times and pay into several pensions over the years. This can make it difficult to keep track of your pension savings and see how your investment is performing – and, in turn, to know whether you are potentially exceeding the LTA levels. If you want to be “re-united” with old pension funds and get a clear picture of the overall value and how it impacts your LTA – we can help!
What to do next…
If your pension is likely to exceed the LTA…..there are a number of schemes in place, but these can be complex and you will need to look at the terms very carefully. Therefore we would recommend getting professional, qualified financial advice. If you complete the form on this page – we can put you in touch with one of our specialist advisors.