Article preview: Initially introduced in 2006, the pension lifetime allowance has been gradually reduced from its peak of £1.8m. For most people, the lifetime allowance in the current 2018/19 tax year is £1,030,000. From 6th April 2019, this will increase to £1,055,000, in line with price inflation as measured by the Consumer Prices Index. It’s an important tax charge to understand, as those with pension benefits exceeding the lifetime allowance have to pay a charge on their excess benefits value. The lifetime allowance is assessed each time you take a benefit from a pension scheme. At this point, the value of the pension benefit is compared against your remaining lifetime allowance, to work out if the lifetime allowance charge is due.
Lifetime allowance tax could trap more than a million pension savers
This 878 word blog post explains the pension lifetime allowance, lifetime allowance charge, and new research from insurer Royal London which has concluded that a significant number of retirees could face a lifetime allowance charge in the future. Written on 24th March 2019.
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