24 Feb UK PENSIONS – The lifetime allowance considerations
The Lifetime Allowance is a limit on the amount of pension benefits that can be drawn from pension schemes. It doesn’t make a difference whether it’s lump sums or retirement income. It can be paid without bringing about an additional tax charge.
The lifetime allowance is currently 1,073,100 GBP for the tax year 2020/21. You should be taking action if your total pension benefit value is either approaching or above the lifetime allowance. As a Pension Scheme is a long-term commitment – What may appear to be modest today could exceed the lifetime allowance by the time you decide to take your benefits. You might have to stop contributing to the plan/scheme or take your pension early even before you have retired to avoid your benefits exceeding the lifetime allowance. Or it may be financially beneficial for you to transfer your existing pensions into a SIPP ( Self – Invested Personal Pension ) The test for the lifetime allowance is to be done every time benefits are accessed.
Book a complimentary meeting to discuss possible U.K. Tax implications on your existing pension schemes.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Bobby Hinchliffe is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.