The Pension Freeze

The Pre-Budget Report revealed a surprise freeze in the lifetime and annual allowances for pension calculations.  The lifetime allowance (LTA) and the annual allowance (AA) are key components of the simplified pension regime.  They effectively set a tax-efficient limit for fund size/benefit value and annual contribution/benefit growth.  The expectation had always been that these allowances would increase each year.  However, the previous Chancellor in his Budget Report announced that would not be the case for five years from 2011/12 and allowances will now stay at their current 2010/11 levels (£1.8m and £255,000).

Any clients who had a pension fund of £1m + as at A-Day (5th April 2006) and who were advised not to opt for enhanced protection will have this situation reviewed and any changes will be notified accordingly. 

Is Your Final Salary Pension Safe?

There has been a lot of publicity recently about final salary pension schemes and just how safe the benefits are within them.

It is usually best to leave benefits with an ex-employer where the value of your deferred pension is guaranteed to increase each year.

If however the company goes into liquidation or the scheme is wound up, these guarantees may not amount to much. If you therefore suspect that your previous company is in financial difficulties, it may be worth revisiting the scheme and investigating the possibility of obtaining a transfer value. The decision can then be taken whether to invest in a plan in your own name, either with or without exposure to stockmarkets, as you prefer.

Or perhaps you are the Trustee of a scheme and feel that you are being charged excessive fees from the different specialists looking after and advising you on your scheme.  At Milne Craig we are able to organise an indepth analysis of your defined benefit (final salary) scheme and perhaps organise a better, less expensive solution.  Contact us to find out more.