This could be either 55% or 25%, depending on whether they were taking a lump sum or income. The Spring Budget in March 2023 reduced this charge to 0%. More recently, the Autumn Statement 2023 confirmed that the LTA would be removed entirely from 6 April 2024, and this has now taken...
Existing LTA-based protection remains valid in the crucial area of accessing the tax-free lump sum, which many savers take out at the start of retirement. For most savers this is 25 per cent of the current £1.073mn LTA but for mainly older people it runs as high as £1.8mn. Hunt ...
Benefits are typically expressed in pounds per annum. Most people, when they retire, can also take some of their benefits as a tax-free lump sum (aka the Pension Commencement Lump sum ‘PCLS’ in fancy terms). If you leave an employer before you retire, your benefits in that employer’s...
Consultants said a cut in LTA from £1.25m to £1m would mean the maximum yearly income from a defined benefit pension within the LTA ceiling would fall by 20 per cent from £62,000 to £50,000. Meanwhile, the maximum annual income a defined contribution pension pot could buy withi...
Partner article: ‘Financial planning should be structured around your personal circumstances and objectives’
The service will handle lump sum additions, regular contributions, and pension transfers. De-accumulators will have the option of flexi-access drawdown from launch. All Vanguard UK’s active and passive funds and ETFs will be available. (I’d expect people to be nudged towards itsTarget Retireme...
The maximum tax-free lump sum on retirement will continue to be determined as GBP 268,275 (25% of GBP 1,073,100) even when the LTA is removed. If members have a protected LTA (if they had savings above the LTA when it was reduced in 2012, 2014 and 2016, they can keep that highe...
Hunt’s Budget day changes mean that readers who had previously taken out “fixed protection”, giving them a higher LTA of up to £1.8mn (and a higher tax-free lump sum) could now make further pensions contributions without invalidating this, although the panel felt few wealthy clients wou...
If you need ready cash in the form of a sizeable lump sum, then taking the 25% tax-free cash via drawdown leaves more options open than taking the equivalent sum out via UFPLS. Note: Do you know all about UFPLS? We’d love to hear from you below. And do read The Greybeard’s ...
In an active DB scheme, not CA probably as don’t know, setting up a parallel avc under the same trustees is a good idea as you can take some or all of the tax free lump sum from the DB scheme out of the avc together with the 25% due from the account. So a DB scheme giving...