DC scheme members could avoid 'lifetime' limit tax - SL

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Members of money purchase schemes could escape having to pay a recovery charge on any funds above the lifetime limit by selecting enhancements which would normally lower the value of an annuity income, says Standard Life.

According to Standard Life's senior technical manager John Lawson, pension scheme members could avoid paying the 55% recovery charge on any funds above the proposed lifetime allowance by buying a "scheme pension". Latest amendments to pending pension rules set out in the Finance Bill states that schemes are allowed to pay a "scheme pension" which is limited for the purposes of the lifetime limit to a pension equal to 1/20th of the allowance, Lawson says. Effectively, this means a scheme member will be allowed a pension of about £75,000 a year based on the introductory £1.5m lifetime l...

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