Lifetime allowance for pensions and how to avoid penalties
- On April 29, 2021
- By GrowthInvest Marketing
The lifetime allowance for pensions need not be the restriction it is often painted as. Clare Munro of Weatherbys Private Bank explains how exceeding the allowance can still work for you.
We’ve had 15 years to get used to the pension lifetime allowance, or LTA, but the possibility of a scary 55% tax charge on ‘excess’ lump sum pension savings still inspires confusion and anxiety in equal measure.
The LTA puts a cap on our total tax-relieved pension pot – currently £1,073,100 – and breaching it will result in a tax cost. Once funds are in a pension scheme, you have little control over the growth and, with the news that the LTA will be frozen until 2026, it’s an issue more of us will need to grapple with.
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