This morning I presented a live webcast on the subject of Fixed Protection and the Lifetime Allowance.
Within this webcast I explained the background to the Lifetime Allowance, introduced in 2006 as part of pension modernisation changes, before describing the reduction in the Lifetime Allowance from £1.8m to £1.5m taking place on 6th April 2012.
When we talk about this subject, we are conscious that the Lifetime Allowance represents some very big numbers, even when it is reduced from the current level down to £1.5m. For this reason, it is not a subject that will have an impact on the vast majority of investors planning for retirement.
However, for those investors with larger pension funds or accumulated income benefits from defined benefit pension schemes, the tax charges for pension benefits over the level of the Lifetime Allowance can best be described as penal.
This is why it is important for some people to consider Fixed Protection to avoid the tax consequences of exceeding the Lifetime Allowance when it is reduced from April.
Before applying for Fixed Protection you should seek specialist independent financial advice to fully understand the pension benefits you might be giving up.
You can watch a recording of the webcast here or by using the viewer below.
