Lifetime Allowance

The Lifetime Allowance for the tax year 2021/2022 is £1,073,100.

You can save as much as you want into your pension however, if it exceeds the £1,073,100, you may be hit with a large tax charge.

It may seem like a lot, and out of your reach, but a pension is a long-term investment and you may be surprised. 

If your pension exceeds the lifetime allowance there is a tax charge of 25% on the excess funds when paid as income or 55% if it’s withdrawn as a lump sum. Even with tax charges, it may still be the better option for high rate tax payers. The extra tax charge is marginal and may still put you in a better net position.

For more information on lifetime allowance and pensions, please call us on 01522 538284 or email us at [email protected] and we can get one of our experienced financial advisers to get in touch.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

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