Comment and Blogs
The lifetime allowance may have been consigned to the annals of history but the various forms of protection are still relevant in the new world, especially when it comes to the amount of pension commencement lump sum (PCLS) that can be taken.
While 2024 ended with a lot of doom and gloom in the pension world following the big announcement on inheritance tax (IHT), there was some good news that may have slipped under the radar of some advisers.
As Benjamin Franklin, one of the founding fathers of the US, famously said: “In this world, nothing is certain except death and taxes.” When it comes to the realm of pension saving in the UK this is certainly true.
We have heard a lot about vulnerable customers recently. Even before the Consumer Duty came along it was a big area of focus for the FCA and now we all have added responsibility under the duty.
As a professional, you will undoubtedly be aware of the effective 60% tax rate on income between £100,000 and £125,140 due to the loss of the personal allowance. For parents of 3 and 4-year-olds the real rate can be much higher.
The removal of the lifetime allowance in the Budget was certainly an attention-grabbing headline.