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Lifetime allowance

In April 2006 the government changed many of the laws relating to pension schemes and the benefits that could be paid from them.  One of these changes was the introduction of the lifetime allowance.

The lifetime allowance is the maximum value of pension benefits that can be paid to you, from all company pension arrangements you have been a member of, before additional tax is charged at a penal rate.

The lifetime allowance is the value placed upon your pension benefits and is not the amount of pension which is being paid to you.

When you retire we will ask you to confirm the percentage of the lifetime allowance which you have already used up from other company arrangements.  You will only need to tell us this if you are taking a pension from the other scheme.  We need this figure before we can pay your pension, as we must check that the value of all your pensions is less than the lifetime allowance.

The lifetime allowance has been fixed by HM Revenue & Customs (HMRC) up to and including the 2015/2016 tax year as follows.

2007/08
£1.6 million
2008/09
£1.65 million
2009/10
£1.75 million
2010/11 to 2015/16
£1.8 million

You may choose to leave the scheme at any time if you believe that you will be affected by the lifetime allowance. In these circumstances the company will pay you a pension allowance with your salary. Please contact us for more details if you find yourself in this position.