What about my other benefits, the charges & your options

What about other pension benefits you may hold?

• If you hold private pensions (not in payment), these need to be added to your total pot. You do not need to factor these up, as it is just the face value that will be applied when calculating the total.
• If you hold other defined benefit or defined contributions pensions (not in payment) from previous employments or savings, current values will need to be sought before an accurate LTA valuation can be calculated.
• If you have any pensions already in payment these must be taken into account and are calculated differently.

What are the tax implications?

The charges that you incur will always be on the excess over the relevant LTA.  However, how you draw these excess benefits will determine how you are taxed.

• If you take excess benefits as a pension the tax charge is 25%, however, the pension would then be liable to income tax
• If you take excess benefits as a lump sum the tax charge is 55% with no further liability

What are your options?

It was possible to preserve the previous higher LTA limits in 2012, these are now closed to new applications.  In 2016 Fixed and Individual Protection was announced, both are still available, with no time limit on application and may still be a legitimate planning tool for you. To understand how and when this applies, please see the Pension Protections Section.

If you are close, or think you may be close, to these figures we recommend you contact us for more information.

Additional Topics relating to the LTA can be found in: