The Government has introduced transitional measures allowing savers to apply for a personalised lifetime allowance of £1.8m.
The measure, published today as part of the Government’s Finance Bill, means that people with savings above £1.5m or who believe the value of their pension pot will rise to above this level through investment growth without any further contributions or pension saving will be able to apply to HMRC for a temporary allowance of £1.8m. However they must cease accruing benefits in all registered pension schemes before April 6, 2012 to qualify.
The Treasury has confirmed the new limit of £1.5m will be introduced from April 6, 2012.
Standard Life senior pensions policy manager Andrew Tully (pictured) says: “This will help individuals with large pension savings who were worried that they would face a large tax charge on any fund exceeding £1.5m.”