Ian Browne: Why the lifetime allowance should be £4.8m

‘Return to policy objective or scrap it altogether”

clock • 3 min read

A growing number of pension savers are penalised by the taxman for exceeding their lifetime allowance (LTA). But this was never the intention of the LTA and should be reformed urgently, writes Ian Browne

A Freedom of Information request recently revealed that tax paid to the Exchequer by pension savers who have exceeded their Lifetime Allowance (LTA) has increased by 80 per cent. The LTA, which was only supposed to impact 5,000 wealthy people when it was first published in 2002, is now a tax on the retirement funds of thousands of ordinary people thanks to its reduction to £1m in April 2016. This means a growing number of taxpayers who have prepared for their retirement by saving up are now being penalised for their forward thinking by the tax system. This was never the intention of the ...

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 Pensions

Time is of the essence for pension transfers, advisers say

Time is of the essence for pension transfers, advisers say

More than half highlighted that they are taking one to six months

Isabel Baxter
clock 28 November 2024 • 3 min read
A decade on: Risks and challenges of freedom and choice

A decade on: Risks and challenges of freedom and choice

'Let me be clear: No one will have to buy an annuity'

Adrian Boulding
clock 25 November 2024 • 6 min read
How retirement planning has transformed over the past 50 years

How retirement planning has transformed over the past 50 years

PPI report looks at the move from predictable pensions to personal responsibility

Jonathan Stapleton
clock 21 November 2024 • 3 min read