View more on these topics

New lifetime allowance won’t come in until 2012

The Treasury will wait until 2012 to cut the lifetime pension allowance to give the industry time to work through the complexities of the change rather than pushing it through in 2011.

In October, the Government confirmed plans to cut the lifetime allowance from £1.8m to £1.5m. The Treasury said it planned for the change to operate from April 2012 but it has been consulting on the burden for schemes and employers of implementation in 2011.

However, an internal memo briefing civil servants on the implications of the pension tax changes indicates a final decision has been made and the reforms will be implemented from April 6, 2012.

The memo, seen by Money Marketing, says: “The Government has announced some major changes to the pension and tax regime. From April 6, 2012, the lifetime allowance will be reduced from its current level of £1.8m to £1.5m.”

A source says: “The industry pushed back on 2011 because people needed time to work this out. But other uncertainties, like RPI and CPI and the protection for people that exceed the £1.5m limit, remain undecided.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. PensionMan is right – how is this even topical. It is not like that decision has been made this morning?

    Obviously there is a current shortage of mindnumbingly banal ideas eminating from Conary Wharf upon which to report – makes a change.

  2. I still don’t understand the logic or justice behind restricting the scope for retirement saving allowed to those members of society who pay the greatest amounts of income tax and whose employers pay the greatest amounts of NIC against their earnings. Is it any wonder that more and more high earners in a position to do so are defecting to countries with more benign tax regimes? There’s plenty of evidence proving that less punitive and restrictive tax regimes stimulates the economy and leads overall to higher tax revenues for the government. The way things are going in the UK, higher tax rates are likely to result in lower overall tax revenues, a slower rate of repairing the public finances and choking off economic recovery. It just doesn’t make sense.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com