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Protect your pensions
from a 55% tax charge
Changes to pension rules in recent years means now could be a good time to revisit your retirement planning. Recent rumours in the press suggest HMRC are considering reducing the Lifetime Allowance yet further as a way of increasing taxes on the ‘rich’ despite the fact more people than ever are being hit by the punitive charges for exceeding the threshold. By acting now you could potentially protect your pension fund from future tax raids by HMRC.
For a free 30 minute consultation on your options to protect your pension from a Lifetime Allowance (LTA) charge with an Independent Financial Adviser (IFA) who has specialist knowledge in this area, please book a convenient time online or phone on 020 3753 4645.

Download our Free Guide
Get instant access to our lifetime allowance guide that has great advice and tips on how to save.
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-
Protect your pensions
from a 55% tax charge

Download our Free Guide
Get instant access to our lifetime allowance guide that has great advice and tips on how to save.
Changes to pension rules in recent years means now could be a good time to revisit your retirement planning. Recent rumours in the press suggest HMRC are considering reducing the Lifetime Allowance yet further as a way of increasing taxes on the ‘rich’ despite the fact more people than ever are being hit by the punitive charges for exceeding the threshold. By acting now you could potentially protect your pension fund from future tax raids by HMRC.
For a free 30 minute consultation on your options to protect your pension from a Lifetime Allowance (LTA) charge with an Independent Financial Adviser (IFA) who has specialist knowledge in this area, please book a convenient time online or phone on 020 3753 4645.
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Background
The Lifetime Allowance (LTA) is a limit on the pension savings you can build up without a charge being applied when you take your benefits.
The limit was introduced as part of the ‘A-Day’ reforms that were brought in on 6th April 2006. It started at £1,500,000 in 2006/07, rose to £1,800,000 in 2011/12 and then steadily reduced to £1,000,000 by 2016/17. It currently stands at £1,073,100 and will remain at this level until at least the 5th April 2025. Any excess will be subject to a lifetime allowance charge and taxed at 55% if taken as a lump sum or 25% if taken as income which will then be subject to income tax. Calculating the value of your benefits for lifetime allowance purposes and when it might be exceeded can be complex. Decisions you make now can have a big impact on your retirement income and lifestyle so it’s important to get the right advice.
The tax take from the lifetime allowance charge, recently published by HMRC, was up six per cent from £269m in 2017 to 2018. This represents the single biggest amount clawed back in one year since the introduction of the allowance in 2006.
This has forced large numbers of pension savers to pay taxes they weren’t aware they would have to pay and disincentivised people from making further contributions, missing out on valuable tax reliefs in the process and undermining confidence in the pension system.
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Options to mitigate
your charge
There are a number of options available to protect pension savers and potentially mitigate their liability to a future Lifetime Allowance charge.
Your individual circumstances and position will determine which options are most appropriate but we will work with you to ensure you minimise the impact of any potential charges while continuing to benefit from the valuable tax reliefs your pensions can offer.
