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

clock

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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on uncategorised

Women in Financial Advice Awards 2026: Nominations close today!

Women in Financial Advice Awards 2026: Nominations close today!

Awards to be held at Hilton Bankside in London

Professional Adviser
clock 08 May 2026 • 1 min read
'Quality is the golden thread' – why Benchmark won Best Advice Network

'Quality is the golden thread' – why Benchmark won Best Advice Network

PA Awards 2026 winner shares secrets to success

Professional Adviser
clock 29 April 2026 • 3 min read
Editor's message: When new beginnings come together

Editor's message: When new beginnings come together

Professional Adviser will be back on Tuesday

Jen Frost
clock 02 April 2026 • 1 min read