Actively managing your pension savings provides multiple benefits, not least taking advantage of tax planning opportunities that can reduce your long-term tax exposure, the income you enjoy during your retirement, and the financial freedoms at your disposal.
Many people ignore pension taxation until the time comes to draw on their lifetime savings, retirement investments and pension products – with potentially disastrous consequences.
With the somewhat sudden pension taxation reforms introduced in the March 2023 budget, it is essential all pension savers, particularly those with funds valued at £800,000 or above or with pension assets that would have previously been exposed to the Lifetime Allowance (LTA), make timely, informed decisions about what this means for them.
Download your free guide today and understand what the changes to the Lifetime Allowance mean for you.
Although the headline announcements around removing the LTA have been well-publicised, numerous other factors may be unclear, such as:
- Ongoing restrictions on lump sum drawdowns, with 25% maximum tax-free thresholds calculated against the previous LTA value.
- Additional (unaffected) tax liabilities linked with larger lump sum withdrawals.
- Conceivable future exposure to inheritance tax liabilities, with policies anticipated to incorporate pension wealth under the full scope of UK inheritance tax calculations.
- Increases to the annual allowance, hampered by high-income tapering, reducing the annual allowance by 50% of every £2 earned above the individual’s adjusted allowance.
It is also important to clarify that the removal of the LTA has yet to be formalised into tax law, and technical modifications are always a possibility when a tax policy transition has not been verified through an official Finance Bill.
Further, the prospect of the LTA being reinstated in just a few short months, should the UK general election in the next year result in a change in government, means time is of the essence for pension holders who wish to maximise their tax efficiencies, both now and into retirement.
Our more detailed guide runs through these and other caveats and factors we believe all pension fund holders should be aware of.
Download your copy now for further insights.
Any tax changes, particularly those that have yet to be thoroughly debated and consulted on in advance, are complex. Knowing what the removal of the LTA means in real terms, how it affects your income, retirement wealth and pension access, and planning accordingly, is important.
Chase Buchanan’s complimentary guide, created by our LTA specialist Malcolm McDowell, is an informative resource to run through the immediate impacts, applicable thresholds and pension caps, and the varied tax obligations that may arise when you choose to access your pension, begin drawing benefits, or pass your retirement wealth to your beneficiaries.
Our pension funds and retirement wealth can make a marked difference to our future comfort and income, and although these sweeping changes introduce an element of uncertainty, a capable pensions specialist can provide assurances, independent guidance and support with structuring your pensions for security, stability and tax-efficiency.
- Changes to the Lifetime Allowance
- Adjusted pension contribution allowances
- Higher-income tapered allowances
- Limitations on access to lump sum pension drawdowns
- The likelihood of further pension tax amendments
- Complexities and caveats to be aware of
About Chase Buchanan
Chase Buchanan is a market-leading wealth management expert, supporting global clients from our offices in Portugal, Cyprus, Spain, Canada, Belgium, the USA, the Isle of Man and our UK Administration Centre.
We have years of experience working with expats throughout Europe and the wider world, and our international offices position us ideally to offer current, accurate and reliable financial recommendations.
Our free Guide resources are designed to provide the most up to date information available at the time of publication. Should you require more tailored advice or further detail on any of the information within your Guide, please contact us at your convenience.
Download LTA Guide
Lifetime Allowance Guide (LTA Advice Guide).
For the latest LTA advice on how the 2023 Lifetime Allowance amendments may affect your retirement plan, then an initial conversation with Malcolm McDowell is a positive place to start or download the free Lifetime Allowance Guide.
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