lifetime allowance

Middle-class savers are now being caught by lifetime allowance stealth tax

One million workers are at risk of breaching the pensions lifetime allowance limit, triggering hefty taxes, research from the mutual insurer Royal London shows.

According to the research, just under 300,000 non-retired people already have pension pots worth more than the current £1.03 million lifetime allowance limit. An estimated £1.25 million more workers are expected to join them by the time they retire.

Steve Webb: when it pays to exceed the annual and lifetime allowance

Regular readers will be aware that HMRC imposes both annual and lifetime limits on the amount of money you can save into a pension while benefiting from tax relief on contributions. What is much less widely known is that it is perfectly legal to exceed those limits, and that in some circumstances it can make good financial sense to do so.

How to outsmart the Lifetime Allowance stealth tax

The Lifetime Allowance (LTA) has caused its fair share of controversy over the last few years. In a nutshell, the LTA is the limit on the amount of pension benefit that can be drawn from pension schemes, whether that be a lump sum or retirement income, before you trigger an extra tax charge.