Financial intermediaries are being advised to review as many clients as possible ahead of A-Day, as a client's life cover could tip some investors over the pension lifetime allowance.
According to guidance issued by progress from Royal Liver, financial advisers may need to assess whether clients should continue to hold life cover attached to a pension from 6th April 2006, as rules governing the pension lifetime allowance mean anyone who is close to that limit could find any monies beyond the limit subject to a 55% tax. Any concerns about the impact of life cover on a pension pot would only be tested should the policyholder die, at which point the sum assured of life cover would be added to the pension fund value and tested against the lifetime allowance. While many i...
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