Lifetime allowance cut will fuel interest in risky products, adviser warns

The Chancellor's reduction of the lifetime allowance, announced in the 2015 Budget could lead to more people looking to invest in products such as venture capital trusts (VCTs), said Dobson and Hodge financial services director Paul Stocks. But these products are not suitable for a lot of people, he warned. Currently, savings of up to £40,000 a year qualify for tax relief with a lifetime limit of £1.25m. However, this will fall to £1m from April 2016, following which a tax charge of either 25% (if used to increase pension) or 55% (if taken as a lump sum) applies. The lifetime al...