Displaying items by tag: LTA

The consultation on the draft legislation for the removal of the lifetime allowance (LTA) has now closed. The industry has given its views and now we have to wait and see what changes – if any – are made to the clauses published so far.

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.

Chancellor Jeremy Hunt shocked the pensions sector in his Budget today by announcing that he would 'scrap' the pensions Lifetime Allowance and increase the annual allowance from £40,000 to £60,000.

Over 325,000 people have successfully applied for protection against breaching the Lifetime Allowance, according to a Freedom of Information response.

The Pensions Lifetime Allowance is set to rise by £5,800 to £1,078,000 next year following news today of the latest CPI inflation rate of 0.5%.

The basic premise on contributions made to pensions is that once the money has gone in, you can’t get it out again until you reach retirement age (or earlier ill health or death). There are very few circumstances when exceptions can be made, and if a refund is made other than as permitted by HMRC, then it would be classed as an unauthorised payment with charges totalling up to 70% of the amount refunded.

With September’s CPI figures now being released we know what next year’s Lifetime Allowance (LTA) will be - £1,054,800. Whilst hardly a dizzying increase we are at least crawling in the right direction after years of being pegged back. I get a few surprised looks when I remind people that the original version of Finance Act 2004 included a clause that the standard lifetime allowance could only increase.

This year's AMPS annual conference was a great success with a 120 attendees and a wide and varied range of subject matter covered. As always there were number of topics which will be of interest to advisers.

Albert Einstein once said that "the hardest thing to understand in the world is income tax".

The recent Budget announcement by the Chancellor that he would reduce the Grand Old Duke of Pensions - the lifetime allowance (LTA) - to £1m from 6 April 2016 will mark the eighth change in the LTA since its introduction in 2006 and this excludes personalised LTA afforded by certain forms of protection.