Are you about to exceed your Life Time Allowance on your pension?
A recent article on Morning Star website states that ‘More than 1 million workers are likely
to breach the pension Lifetime Allowance (LTA) and be liable for a hefty tax bill…’1
Scary to think then that many people who are statistically likely to be affected by the
pension lifetime allowance don’t fully understand it.
Let me give you an example.
Doctors (and other types of medics) frequently find themselves affected towards the second
half of their career. Assuming that you graduated in in your early twenties and continue to
work until your late sixties, you’ve got somewhere in the region of fifty years of earning.
Couple that with earnings in the latter part of your career, at consultant level, tending to be
in excess of £82,096 per annum2
and you have a recipe for disaster if left unattended.
SO, WHAT ARE THE IMPLICATIONS OF EXCEEDING YOUR LTA?
Simply put, charges rather than tax breaks!
The good news is that pensions are not the only means of saving towards your retirement.
Speak to someone you trust earlier rather than later. Planning ahead is always better than
trying to deal with the consequences.
1 https://www.morningstar.co.uk/uk/news/209287/the-pension-lifetime-allowance-explained.aspx
2 https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-doctors
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