• Contact us
  • About us
  • Digital edition
  • Online archive
Saturday, June 21, 2025
Cumberland and Westmorland Herald
  • News
    Farms focus on cashflow following SFI scheme closure

    Farms focus on cashflow following SFI scheme closure

    MP asks for Government help over plans to replace M6 bridges

    MP asks for Government help over plans to replace M6 bridges

    Resurfacing work to start in Shap – road to be closed for 21 days

    Resurfacing work to start in Shap – road to be closed for 21 days

    Arrests after drugs raid in Penrith

    Arrests after drugs raid in Penrith

    New Kirkby Stephen shop blends retail with purpose

    New Kirkby Stephen shop blends retail with purpose

    New vicar appointed for churches

    New vicar appointed for churches

    Award for Eden writer

    Award for Eden writer

    Penrith man admits possessing cannabis twice with intent to supply

    Penrith man admits possessing cannabis twice with intent to supply

    Risks and strategies for flexible pension drawdown

    Risks and strategies for flexible pension drawdown

  • Sport
    Medal success for Upper Eden tug-of-war team

    Medal success for Upper Eden tug-of-war team

    Eden man competes in Hyrox World Games

    Eden man competes in Hyrox World Games

    Double national triumph for Stuart Robinson

    Double national triumph for Stuart Robinson

    Patterdale’s Eden Eagles make history

    Patterdale’s Eden Eagles make history

    Penrith teen crowned British vault champion

    Penrith teen crowned British vault champion

    Penrith gymnasts represent North of England in finals

    Penrith gymnasts represent North of England in finals

    New boss revealed for Penrith AFC

    New boss revealed for Penrith AFC

    Penrith Panthers celebrate winning season

    Penrith Panthers celebrate winning season

    Darren Edmondson leaves Penrith AFC

    Darren Edmondson leaves Penrith AFC

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
  • News
    Farms focus on cashflow following SFI scheme closure

    Farms focus on cashflow following SFI scheme closure

    MP asks for Government help over plans to replace M6 bridges

    MP asks for Government help over plans to replace M6 bridges

    Resurfacing work to start in Shap – road to be closed for 21 days

    Resurfacing work to start in Shap – road to be closed for 21 days

    Arrests after drugs raid in Penrith

    Arrests after drugs raid in Penrith

    New Kirkby Stephen shop blends retail with purpose

    New Kirkby Stephen shop blends retail with purpose

    New vicar appointed for churches

    New vicar appointed for churches

    Award for Eden writer

    Award for Eden writer

    Penrith man admits possessing cannabis twice with intent to supply

    Penrith man admits possessing cannabis twice with intent to supply

    Risks and strategies for flexible pension drawdown

    Risks and strategies for flexible pension drawdown

  • Sport
    Medal success for Upper Eden tug-of-war team

    Medal success for Upper Eden tug-of-war team

    Eden man competes in Hyrox World Games

    Eden man competes in Hyrox World Games

    Double national triumph for Stuart Robinson

    Double national triumph for Stuart Robinson

    Patterdale’s Eden Eagles make history

    Patterdale’s Eden Eagles make history

    Penrith teen crowned British vault champion

    Penrith teen crowned British vault champion

    Penrith gymnasts represent North of England in finals

    Penrith gymnasts represent North of England in finals

    New boss revealed for Penrith AFC

    New boss revealed for Penrith AFC

    Penrith Panthers celebrate winning season

    Penrith Panthers celebrate winning season

    Darren Edmondson leaves Penrith AFC

    Darren Edmondson leaves Penrith AFC

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
No Result
View All Result
Home Latest
This article appears as part of a paid partnership with Armstrong Watson

Are pension lifetime allowance cuts on the horizon?

by CWH
15 October 2021
in Latest, Sponsored
A A
Share on FacebookShare on Twitter
Rishi Sunak

Chancellor Rishi Sunak announced in his March Budget that the lifetime allowance (LTA), which governs how much can be saved in a pension before tax charges apply, would remain at its current level of £1.073m until 2025/26.

This was a reversal of policy introduced three years ago where the LTA was due to increase in line with inflation.

New HMRC statistics show that the LTA continues to bring in revenues for HM Treasury.

However, due to the increasing pressure on the Treasury to raise revenue due to the unprecedented levels of debt the UK has accumulated because of the global pandemic, there are rumoured cuts at the next Budget which could be a cause for concern for those retiring in the future.

The LTA started life at £1.5 million in 2006/07 and peaked at £1.8 million in 2010/11.

Since then, it has been cut three times and regularly frozen. Had the LTA merely been increased in line with the Consumer Price Index (CPI) since 2006, it would by now be close to £2.1 million – nearly double its current level.

The reason why the LTA has been steadily devalued is to some extent explained by the graph above, which is based on revised and updated data recently issued by HMRC.

It shows that in 2018/19 more than 7,000 LTA charges on pension scheme members were reported, with total tax payments of £283 million – an average of almost £40,000 per head.

The LTA benefits the Treasury in another, more subtle way. It presents a stark disincentive to make pension contributions for anyone with retirement funds that could reach – or have already reached – the LTA.

This is especially true if you have any of the various LTA transitional protections that have been introduced over the years. The rules for some types of protection are such that any fresh contribution revokes the protection.

For example, if you have Fixed Protection 2012, £1 of pension contribution would mean you lose a protected LTA of £1.8 million, potentially leading to a six-figure tax bill when benefits are drawn.

However, the legislative protections, some of which date back to 2006, are now all the more valuable as they provide protection in some cases much greater than the current LTA.

In practice, it may not be possible to avoid an LTA charge.

Some employers will not offer a salary alternative to a pension contribution and in those circumstances suffering the maximum 55 per cent LTA charge might be better than foregoing 100 per cent.

Higher than projected investment performance can also see your pension pot grow above the lifetime allowance causing you to pay an LTA charge.

As discussed there have been renewed rumours that the Chancellor will cut the LTA in the next Budget, with threshold figures between £800,000 and £900,000 as popular guesstimates.

If that or any other aspect of the LTA concerns you, it is important to seek professional advice on your options before taking action.

The LTA is only one of many tax traps surrounding pensions.

Any changes to pension rules aren’t likely to be announced until the Autumn Budget.

It’s not certain what changes will take place, or if there will be any changes at all. But you can prepare your retirement savings, so you’re not faced with any surprises.

If you think you might need to consider how you may be impacted by the Lifetime Allowance, either based on current benefits or when you retire, you could benefit from personalised financial advice.

We can provide a full review of your pension arrangements, with our compliments in the first instance, to help you to understand your position with regards to your current pension arrangements and whether this is an area you need to consider.

Paul Moody, of Armstrong Watson

Contact Paul on 01768 222030.

Related Posts

Farms focus on cashflow following SFI scheme closure
Expert advice

Farms focus on cashflow following SFI scheme closure

21 June 2025
MP asks for Government help over plans to replace M6 bridges
Latest

MP asks for Government help over plans to replace M6 bridges

20 June 2025
Resurfacing work to start in Shap – road to be closed for 21 days
Latest

Resurfacing work to start in Shap – road to be closed for 21 days

20 June 2025
Arrests after drugs raid in Penrith
Latest

Arrests after drugs raid in Penrith

20 June 2025
Risks and strategies for flexible pension drawdown
Expert advice

Risks and strategies for flexible pension drawdown

15 June 2025
Pub landlord must remove Covid canopy
Latest

Pub landlord must remove Covid canopy

13 June 2025
No Result
View All Result

Stay connected

Facebook Twitter Instagram

Most popular

Arrests after drugs raid in Penrith

Arrests after drugs raid in Penrith

20 June 2025
New vicar appointed for churches

New vicar appointed for churches

20 June 2025
Award for Eden writer

Award for Eden writer

20 June 2025
Eden man competes in Hyrox World Games

Eden man competes in Hyrox World Games

20 June 2025
MP asks for Government help over plans to replace M6 bridges

MP asks for Government help over plans to replace M6 bridges

20 June 2025
Looking back through the archives

Looking back through the archives

20 June 2025
Cumberland and Westmorland Herald Logo

33 Middlegate
Penrith
Cumbria
CA11 7SY

Phone: 01768 862313
Email: news@cwherald.com

Registered in England as Barrnon Media Limited. No: 12475190
VAT registration number: 343486488

Explore

  • News
  • Sport
  • Farming
  • Property
  • Obituaries
  • Nostalgia
  • Your view

Useful links

  • Contact us
  • Photosales
  • Online archive
  • Buy your paper
  • Digital edition
  • North Lakes Living
  • Advertise
  • About us

Follow us on

© Barrnon Media Limited 2025

Terms & Conditions / Privacy Policy / Cookie Policy

This website and its associated newspaper are members of the Independent Press Standards Organisation
Review Your Cart
0
Discount
Add Coupon Code
Subtotal
Total Installment Payments
Bundle Discount
Checkout

 
0
No Result
View All Result
  • Home
  • News
  • Sport
  • Obituaries
  • Nostalgia
  • Online archive
  • more
    • North Lakes Living
    • Buy Photos
    • Buy your paper
    • About us
    • Contact us

© 2020 Cumberland & Westmorland Herald