From 6 April 2014, the Lifetime Allowance reduced to £1.25 million and from 6 April 2016, it reduced again to £1million. However, with effect from 6 April 2018 the LTA will increase annually in line with the Consumer Prices Index (CPI) to £1.03 million. In 2021 the Lifetime Allowance was frozen at £1,073,100 until 2026.
This means that more members may have pension savings that exceed the Lifetime Allowance so it is important that you understand how your pension benefits are affected. Remember, you need to take account of all pension benefits you build up, not just those in the AA Pension Scheme.
If you think you may be affected by the reduced LTA, it is a good idea to speak to an independent financial advisor. If you do not have your own adviser, you can find one local to you at www.unbiased.co.uk
You can obtain further information about the Annual Allowance and LTA, including available protections from the HMRC website www.gov.uk/tax-on-your-private...