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Urgent lock in protection needed for pensions
Head of pensions technical at Legal & General Savings, Colin Batchelor says pension plans could be hit badly unless some harsh choices are made.
The taxman could end up getting up to £165,000 extra from an individual’s pension fund unless protection action is taken.
On April 6, 2012, the lifetime allowance will be reduced by £300,000 from £1.8m to £1.5m, with a 55 per cent tax charge on any excess benefits taken as a lump sum or 25 per cent if providing a taxable income.
A fixed protection certificate can be obtained by returning an application to HMRC by April 5, 2012. Under a money-purchase arrangement no further contributions can be made after April 5, 2012.
Fixed protection will be lost if a transfer is made to a non-registered pension scheme, an overseas scheme or to a DB scheme from a money-purchase scheme.
For more information please contact Paul Bradshaw at McEwan Wallace Wealth Management on 0151 647 6682 or email enquiries@wallace.co.uk.
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