Pensions and tax, keeping you up-to-date

This date is also referred to as A-day. If all of your pension saving is already in payment, and you have no intention of starting a new pension, you do not need to worry about the Lifetime Allowance.

If you have other pension savings which were not in payment at April 2006 (for instance, if you have another job or you have a personal pension fund which you have not yet used to buy an annuity), then you should value your pensions at 5 April 2006 (Pensions that are already in payment on A-Day are valued by multiplying the annual amount by 25). If the combined valuation of your pension(s) in payment plus your pension saving is more than £1.5 million then you should consider registering with the Inland Revenue (now part of HM Revenue and Customs (HMRC)) for transitional protection. This will allow you to ‘protect’ the value of your pension saving at its 5 April 2006 level and will mean that you do not pay more tax than you should. You will have three years from 6 April 2006 to register for transitional protection.

If your pensions are valued at more than the Lifetime Allowance, any new pension saving you make after 6 April 2006 will be subject to extra tax when the pension comes into payment.

Please contact the Member Administration Section if you require further information. You can find their number in the contact us section.