"I have known David Henderson for seven years and during that time, he has had full control of my financial investment portfolio through retirement and the consequences of adjustment to widowhood. I have never had any cause to doubt his skilled advice and commitment. This has been delivered through a friendly and totally reliable relationship. I have regarded him as a trustworthy friend and in terms of the financial manoeuvres, his practical adjustments have (thus far in a volatile world!) all been safe and successful. He has been helpfully reassuring at times based on an extensive knowledge of theway the markets and global economy works I find this very educational. I have recommended his services to several friends all of whom have commented most favourably after his input totheir finances."
Lifetime Allowance
On 6 April 2018, the Lifetime Allowance increased to £1,030,000, an increase of £30,000 on the previous tax year.
The Lifetime Allowance (LTA) is one of the pension controls originally introduced on ‘A’ day (6 April 2006), when the Government sought to simplify pensions by introducing a single set of common rules that apply to all UK pension products.
The LTA is the limit placed on the amount of pension benefit that can be drawn from pension schemes, whether lump sums or retirement income. Exceeding it will trigger a tax charge.
The test for the LTA is done each time you access a pension benefit. When benefits are taken, you use up a percentage of the available allowance. This is known as a Benefit Crystallisation Event (BCE). It is usually the amount paid out or moved to provide retirement income. For defined benefit pensions, the value is normally treated as 20 times the initial amount of pension, plus any tax-free cash.
As pensions are normally a long-term commitment, what appears as a relatively modest pension today could ultimately exceed the lifetime allowance by the time you want to take your benefits.
In some cases, to avoid your benefits exceeding the applicable LA, it may be beneficial to bring forward the date you begin to take your pension; or to stop making contributions to your personal pension, workplace pension, employer’s scheme or SIPP, even though you have not yet retired.
If you are unsure whether or not your current pension savings will exceed this allowance, you should contact us.
Pensions are a long-term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change therefore the tax treatment of pension benefits can and may change in the future.
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