Pensions Lifetime Allowance

[RESSE]

LIFETIME ALLOWANCE

If someone has an existing pension fund of £1,000,000 and it is expected to rise over the next few years, what (if anything) can be done to protect the fund from a charge when the lifetime allowance drops to £1.25 million wef 06/04/2014?

Does "Fixed Protection" prevent the charge being applied should the fund be over the lifetime allowance?

Does anyone know if there are any proposed changes to the 25% tax free element (bit of a long shot this one)?

[NatAsp]

RESSE said:

LIFETIME ALLOWANCE

If someone has an existing pension fund of £1,000,000 and it is expected to rise over the next few years, what (if anything) can be done to protect the fund from a charge when the lifetime allowance drops to £1.25 million wef 06/04/2014?

Does "Fixed Protection" prevent the charge being applied should the fund be over the lifetime allowance?

Does anyone know if there are any proposed changes to the 25% tax free element (bit of a long shot this one)?

Fixed protection will fix the lifetime allowance at 1.5 mil. However, once attained, it will be lost if any additional pension contributions are made (except benefit accrual under a defined benefit scheme, within statutory limits).

It's therefore only suitable for individuals who do not intend to add further funds, but envisage their existing assets growing above 1.25 mil before "retirement".

No proposed changes to PCLS, but there's constant speculation around this, and there was talk of it being restricted to a monetary amount a couple years back. In my opinion, it would be political/economic suicide to discourage pension saving when our ageing population is already such a burden. If it does happen, I wouldn't expect it to be for many years.

Edited by NatAsp on Wednesday 15th January 12:06

[The Leaper]

See here:

https://www.gov.uk/government/uploads/system/uploa...

R.

[RESSE]

Thanks for the replies.

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