Pensions: Will you be hit by 55% tax charge?
Senior doctors who breach the new lifetime allowance – the total amount you can put into your pension free-of-tax – will face tax charges of up to 55 per cent if they fail to act now.
From April, the lifetime allowance or LTA will fall to just £1million having been as high as £1.8 million previously.
As a very rough guide, individuals whose pensions are worth £50,000 a year or more will easily reach the £1million ceiling, before taking into account any benefits from private pensions.
Have you checked your position? It is very easy for busy professionals to believe this rate change does not apply to them. The very nature of the NHS pension scheme means that savers who have diligently made contributions over several decades will be hardest hit. It can take some months to gather the information needed from the NHS pension agency in order to establish your situation so you must move quickly.
For more information or to check your status, please call one of our advisers on 020 7636 7006.