Client Portal Independent financial planning advice for teachers

Teachers Logo
  • Home
  • Advice
  • About Us
  • Seminars
  • News
  • Downloads
  • Contact
Email
Home/News/Teachers Pension/Lifetime Allowance Update
loading...

Lifetime Allowance Update

01/04/2015 Ged O'Neil Bell

The final budget of this Parliament was delivered by the Chancellor of the Exchequer on the 18th of March 2015. The only change targeted at pensions involved the Lifetime Allowance (LTA). The LTA will decrease from £1.25 million to £1 million from the 6th of April 2016. The Government will also index the LTA from 2018 in line with the Consumer Prices Index. This change will affect only the wealthiest pension savers, as only 4% of individuals currently approaching retirement have a pension pot worth more than £1 million.

Lowering of the threshold means more individuals will be affected in the future. To ensure the change is not retrospective, the Chancellor announced that transitional protection for pension rights already over £1 million will be introduced alongside the reduction.

The Annual Allowance for Defined Benefit schemes such as the Teachers’ Pension Scheme will remain at £40,000, but could reduced by £10,000 in a tax year if a member accesses the new pension flexibilities on or after the 6th of April 2015 and contributes £10,000 or more to a Defined Contribution scheme.

HMRC also confirmed that the new career average scheme has to be registered as a separate scheme in its own right. This means Teachers’ Pensions members who had previously applied and received Enhanced Protection, Fixed Protection 2012 and Fixed Protection 2014 could lose their protection if they join the new scheme and begin paying pension contributions.

If you think you may be affected by these changes, Teachers’ Pensions are recommending that you seek the advice of an independent financial adviser.

Share this article:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
Posted under: Teachers Pension


Make an enquiry

Please complete and send the short contact form below and we will come back to you as soon as possible.

    First Name

    Telephone

    Email

    Enter code captcha

    Message
    ifa logo
    Apple App Store Google Play Store
    • Site Map
    • Cookies
    • Legal
    • Privacy
    • Careers
    • Facebook
    • Google
    • Twitter
    • LinkedIn

    Teachers Financial Planning Limited is an appointed representative of LJ Financial Planning Limited which is authorised and regulated by the Financial Conduct Authority. Financial Services Authority firm registration number 552276. Content on this website is provided for information purposes only and should not be considered advice. The information contained within this website is subject to the United Kingdom regulatory regime and is therefore primarily targeted to consumers in the United Kingdom. Registered in England & Wales 07612896. Registered Office: St James Business Centre, Wilderspool Causeway, Warrington, WA4 6PS. Calls to 08452 69 69 90 cost 5p [or 5p per minute] plus your phone company's access charge.

    © 2011-2020 Teachers Financial Planning Limited.
    Website designed and developed by Carpe Diem
    This website uses cookies to improve performance: Find out more.