Pension lifetime allowance
Post Author:
Angie Harvey
Date Posted:
November 20, 2018
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This is the sixth and final blog in our pension series, which looks at the pension lifetime allowance and the consequences of exceeding this.
The lifetime allowance is currently £1,030,000 and should increase in line with inflation at the end of each tax year. This limit applies to all pensions, including the value of any defined benefit (final salary) schemes, but excluding the State Pension.
The lifetime allowance has been reduced by the Government on several occasions since it was originally introduced. As a result of this, in certain circumstances it is possible to apply to protect the level of your pension savings from 6 April 2016.
Lifetime allowance charges of 55% can be applied to the excess pension savings over the lifetime allowance. The charges apply at each point a pension pay-out occurs.
To avoid these charges, it might be necessary to stop contributing to your scheme or take your pension earlier than planned.
Pension Tax Charges and ‘Scheme Pays’
Already in pension drawdown and want to continue contributing
