Every senior doctor will be affected by the latest cut to the lifetime allowance (LTA). The limit has been reduced three times in four years and in April 2016, will fall to just £1million for the 2016-17 tax year. Those breaching the savings threshold face a 55 per cent tax charge.
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.
We are speaking with more and more high-achieving consultants from across the country who are now reviewing their options.
Previously when the government has reduced the LTA, it has offered protection schemes such as Fixed Protection 2012 and 2014 as well as Individual Protection 2014. Despite promising details of new protection options by ‘the end of summer’, an official announcement has not yet been made.
While we await news of transitional protection, it is extremely useful to obtain the necessary valuations of your pension now in order to make the best possible judgement of your position before April. There are many complicating factors, particularly with the NHS pension scheme, and the more time you have to obtain a full picture of your finances the better.
For more information, please call Cavendish on 0207 636 7006.