• Contact us
  • About us
  • Digital edition
  • Online archive
Tuesday, July 22, 2025
Cumberland and Westmorland Herald
  • News
    Mandatory payrolling of Benefits in Kind delayed

    Mandatory payrolling of Benefits in Kind delayed

    Youngsters raise cash for Penrith food bank

    Youngsters raise cash for Penrith food bank

    Commissioner promises improvements to Cumbria’s fire and rescue service

    Commissioner promises improvements to Cumbria’s fire and rescue service

    Illegal campers fined for causing significant damage in Lake District

    Illegal campers fined for causing significant damage in Lake District

    Man dies after falling from A66 bridge

    Man dies after falling from A66 bridge

    New senior coroner appointed for Cumbria

    New senior coroner appointed for Cumbria

    Red letter day for young Skelton farmer

    Red letter day for young Skelton farmer

    Cumbrian bellringers success in national contest

    Cumbrian bellringers success in national contest

    Bid to turn barns into homes get go-ahead

    Bid to turn barns into homes get go-ahead

  • Sport
    New management set to lead Appleby Football Club

    New management set to lead Appleby Football Club

    Success for fighting squad

    Success for fighting squad

    Penrith skipper Nicky Burns calls on team to keep winning

    Penrith skipper Nicky Burns calls on team to keep winning

    £100,000 target for new changing rooms extension

    £100,000 target for new changing rooms extension

    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

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
  • News
    Mandatory payrolling of Benefits in Kind delayed

    Mandatory payrolling of Benefits in Kind delayed

    Youngsters raise cash for Penrith food bank

    Youngsters raise cash for Penrith food bank

    Commissioner promises improvements to Cumbria’s fire and rescue service

    Commissioner promises improvements to Cumbria’s fire and rescue service

    Illegal campers fined for causing significant damage in Lake District

    Illegal campers fined for causing significant damage in Lake District

    Man dies after falling from A66 bridge

    Man dies after falling from A66 bridge

    New senior coroner appointed for Cumbria

    New senior coroner appointed for Cumbria

    Red letter day for young Skelton farmer

    Red letter day for young Skelton farmer

    Cumbrian bellringers success in national contest

    Cumbrian bellringers success in national contest

    Bid to turn barns into homes get go-ahead

    Bid to turn barns into homes get go-ahead

  • Sport
    New management set to lead Appleby Football Club

    New management set to lead Appleby Football Club

    Success for fighting squad

    Success for fighting squad

    Penrith skipper Nicky Burns calls on team to keep winning

    Penrith skipper Nicky Burns calls on team to keep winning

    £100,000 target for new changing rooms extension

    £100,000 target for new changing rooms extension

    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

  • 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

Mandatory payrolling of Benefits in Kind delayed
Expert advice

Mandatory payrolling of Benefits in Kind delayed

20 July 2025
Youngsters raise cash for Penrith food bank
Latest

Youngsters raise cash for Penrith food bank

19 July 2025
Five boxes of nitrous oxide seized from car in Penrith
Latest

Five boxes of nitrous oxide seized from car in Penrith

17 July 2025
Cumbrian firefighters tackle early hours barn blaze
Latest

Cumbrian firefighters tackle early hours barn blaze

17 July 2025
Penrith’s Enterprise Hub plans start to take shape
Latest

Penrith’s Enterprise Hub plans start to take shape

11 July 2025
Inflation and the impact on savings
Expert advice

Inflation and the impact on savings

11 July 2025
No Result
View All Result

Stay connected

Facebook Twitter Instagram

Most popular

Commissioner promises improvements to Cumbria’s fire and rescue service

Commissioner promises improvements to Cumbria’s fire and rescue service

18 July 2025
Cumbrian bellringers success in national contest

Cumbrian bellringers success in national contest

18 July 2025
Youngsters raise cash for Penrith food bank

Youngsters raise cash for Penrith food bank

19 July 2025
All change at Penruddock Primary School

All change at Penruddock Primary School

18 July 2025
Bid to turn barns into homes get go-ahead

Bid to turn barns into homes get go-ahead

18 July 2025
New management set to lead Appleby Football Club

New management set to lead Appleby Football Club

18 July 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