Five choices for the forthcoming pension’s lifetime allowance changes

From 6 April 2016, the pension lifetime allowance (LTA) is set to reduce to £1m. This reduction means many more individuals will be affected by the threshold and may face a LTA tax charge. Depending on the value of an individual’s pot (as at 5 April 2016), five choices are available when determining pension protection:

The key factors in deciding which option is best for you are:

  • Value of pension benefits
  • Age and/ or time to retirement
  • Attitude to risk and expected investment returns
  • Employer contributions

These variables are all interlinked and we would advise you to consider all of them in terms of your circumstances. The rules are complex and there isn’t a one size fits all option. It’s important to consider your pension planning goals and discuss with your advisor what is best for you.

For more information, please contact Gordon Birrell or Mark Dobson on 0131 558 5800.