Yet more pension changes!

Posted by: Swindells FP, on September 20, 2013.

Next April the amount of pension scheme savings you are allowed to amass (excluding State entitlements) before they become subject to penal tax rates of up to 55% is set to reduce yet again.  This limit is known as the Lifetime Allowance.

Initially this limit was set at £1.8m and has reduced to its present £1.5m and set for a further fall in April to £1.25m.  The Liberal Democrats have even stated intent to reduce this even further to £1m.

You may think that reaching these sorts of figures under your pension plans is just a dream, but when all of your pension pots are added together and if you are perhaps lucky enough to have gained entitlements under employer final salary schemes, reaching the Lifetime Allowance may be more of a reality than you think.

Additionally the obvious trend of a reducing Lifetime Allowance coupled with future investment returns and the compounding effects of pension contributions could mean many people will reach this limit.

There are however methods of safeguarding against these Lifetime Allowance charges including electing for protections granted by HMRC.

The most important step is to review your current pension provisions combined with your retirement spending plans and to then assess whether current pension legislation will impact upon you and crucially, what can be done about it.

Swindells Financial Planning are experts in pre and post retirement planning and can help you create a financial plan based around your unique financial challenges.  We will provide you with the expert technical knowledge required to navigate the complex pension world successfully.


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