Reducing the annual and lifetime allowances for pension saving

Resource type: Practice note

Status: Maintained

Jurisdictions: England, Scotland, Wales

This note examines the coalition government's measures to restrict the availability of tax relief on pension saving by reducing the annual and lifetime allowances. As well as looking at the circumstances in which an annual allowance charge is triggered, the note highlights some key practical issues for trustees and employers, including the obligation to provide pension savings statements to members. The note also refers to the announcement of further reductions to the annual and lifetime allowances made at the 2012 Autumn Statement to take effect from the 2014/15 tax year.

PLC Pensions

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Resource ID: 5-503-6633
Products: PLC UK Pensions, PLC UK Private Client, PLC UK Public Sector, PLC UK Share Schemes & Incentives, PLC UK Tax
This resource is maintained, meaning that we monitor developments on a regular basis and update it as soon as possible.

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Topics

Incentives and Pensions: TaxIncentives and Pensions: Tax (http://uk.practicallaw.com/9-376-3553)
Lifetime PlanningLifetime Planning (http://uk.practicallaw.com/1-383-2273)
Policy and Reform: Pensions and Retirement BenefitsPolicy and Reform: Pensions and Retirement Benefits (http://uk.practicallaw.com/0-103-1345)
Tax and Accounting: PensionsTax and Accounting: Pensions (http://uk.practicallaw.com/8-103-1346)
Tax and NICs for IncentivesTax and NICs for Incentives (http://uk.practicallaw.com/6-205-7176)

Practice note: overview

Finance Act 2011: pensions provisions: a quick guide Finance Act 2011: pensions provisions: a quick guide (http://uk.practicallaw.com/topic6-517-1569)
Money purchase pension schemes: overview Money purchase pension schemes: overview (http://uk.practicallaw.com/topic8-422-1664)
Pensions in the UK: overview Pensions in the UK: overview (http://uk.practicallaw.com/topic2-235-7983)
Pensions tax: overview Pensions tax: overview (http://uk.practicallaw.com/topic6-204-0440)

Practice notes

Disguised remuneration legislation: impact on pension schemes Disguised remuneration legislation: impact on pension schemes (http://uk.practicallaw.com/topic2-508-6988)
Paying an annual allowance charge: "scheme pays" mechanism Paying an annual allowance charge: "scheme pays" mechanism (http://uk.practicallaw.com/topic0-509-0854)
Pensions tax: fixed protection and new 2014 protections from a lifetime allowance charge Pensions tax: fixed protection and new 2014 protections from a lifetime allowance charge (http://uk.practicallaw.com/topic0-524-8086)
Pensions tax: transitional protection Pensions tax: transitional protection (http://uk.practicallaw.com/topic1-208-3955)
Restricting pensions tax relief: anti-forestalling measures Restricting pensions tax relief: anti-forestalling measures (http://uk.practicallaw.com/topic5-422-1726)
Restricting pensions tax relief: Labour government's plans Restricting pensions tax relief: Labour government's plans (http://uk.practicallaw.com/topic8-501-1339)
Stakeholder pensions Stakeholder pensions (http://uk.practicallaw.com/topic2-336-4954)

Standard documents

Deed of amendment: Finance Act 2011 Deed of amendment: Finance Act 2011 (http://uk.practicallaw.com/topic4-507-2264)
Pension scheme trust deed and rules Pension scheme trust deed and rules (http://uk.practicallaw.com/topic1-501-5637)

Glossary

Annual allowance Annual allowance (http://uk.practicallaw.com/topic6-201-6478)
Annual allowance charge Annual allowance charge (http://uk.practicallaw.com/topic5-507-1382)
Benefit crystallisation event (BCE) Benefit crystallisation event (BCE) (http://uk.practicallaw.com/topic9-380-6406)
Consumer Prices Index (CPI) Consumer Prices Index (CPI) (http://uk.practicallaw.com/topic3-378-7892)
Deferred member Deferred member (http://uk.practicallaw.com/topic2-107-6069)
Employer-financed retirement benefits scheme Employer-financed retirement benefits scheme (http://uk.practicallaw.com/topic6-205-6493)
Enhanced protection Enhanced protection (http://uk.practicallaw.com/topic4-204-0653)
Fixed protection Fixed protection (http://uk.practicallaw.com/topic6-507-1857)
Government Actuary's Department (GAD) Government Actuary's Department (GAD) (http://uk.practicallaw.com/topic5-386-5030)
HM Revenue & Customs (HMRC) HM Revenue & Customs (HMRC) (http://uk.practicallaw.com/topic6-200-6399)
Income tax additional rate Income tax additional rate (http://uk.practicallaw.com/topic7-518-7466)
Lifetime allowance Lifetime allowance (http://uk.practicallaw.com/topic8-201-6477)
Limited price indexation (LPI) Limited price indexation (LPI) (http://uk.practicallaw.com/topic8-206-3992)
Occupational pension scheme Occupational pension scheme (http://uk.practicallaw.com/topic8-107-6900)
Pay as you earn (PAYE) Pay as you earn (PAYE) (http://uk.practicallaw.com/topic4-200-3405)
Pension credit Pension credit (http://uk.practicallaw.com/topic2-205-8984)
Pension debit Pension debit (http://uk.practicallaw.com/topic5-205-8987)
Pension input amount Pension input amount (http://uk.practicallaw.com/topic4-504-0739)
Pension input period Pension input period (http://uk.practicallaw.com/topic5-504-0734)
Personal pension scheme Personal pension scheme (http://uk.practicallaw.com/topic4-107-7001)
Registered pension scheme Registered pension scheme (http://uk.practicallaw.com/topic5-201-6474)
Retail Prices Index (RPI) Retail Prices Index (RPI) (http://uk.practicallaw.com/topic5-377-4351)
Serious-ill-health lump sum Serious-ill-health lump sum (http://uk.practicallaw.com/topic8-204-0444)
Special annual allowance Special annual allowance (http://uk.practicallaw.com/topic8-386-4425)
State second pension (S2P) State second pension (S2P) (http://uk.practicallaw.com/topic1-200-3464)

Legal update: archive

ACA responds to consultation on annual allowance regulations ACA responds to consultation on annual allowance regulations (http://uk.practicallaw.com/topic6-523-6622)
Annual and lifetime allowances to be reduced under Treasury plans Annual and lifetime allowances to be reduced under Treasury plans (http://uk.practicallaw.com/topic7-503-6203)
Ask the team: How high earners can benefit from the reduced annual allowance Ask the team: How high earners can benefit from the reduced annual allowance (http://uk.practicallaw.com/topic3-503-9171)
HMRC announces delay in block transfer change to annual allowance rules HMRC announces delay in block transfer change to annual allowance rules (http://uk.practicallaw.com/topic2-524-0961)
Restricting pensions tax relief: government consults on alternative approach Restricting pensions tax relief: government consults on alternative approach (http://uk.practicallaw.com/topic7-502-9146)

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