PENSIONS LIFETIME ALLOWANCE (LTA) TO FALL AGAIN
From the 6th April 2016, the maximum pension fund that can be crystallised before being taxed is dropping from £1,250,000 to £1,000,000.
For individuals who have “money purchase” pensions, your LTA will be tested when taking your pension benefits and again at age 75. If you retired several years ago without protection, you may be liable to the LTA tax of 55% when your funds are re-tested at age 75.
The new LTA is not due to increase again until 2020. For those in retirement who do not already have LTA protection, we would recommend you review your position and consider applying for protection as soon as possible.
To help you understand the implications of the new changes, Swallow Financial Planning has created an online note summarising these in full for you to review.
As always, if you have any further questions do contact us on our usual numbers.