JLT Wealth Management is to re-launch its lifetime allowance audit service.
This follows the reduction of the lifetime allowance, announced by Chancellor George Osborne in the Autumn Statement in December 2012, which is due to take effect from April 2014.
The objectives of the lifetime allowance audit are:
- To establish a precise valuation of benefits from all schemes and compare this with the lifetime allowance, which is currently set at £1.5 million but will reduce to £1.25 million on 6 April 2014.
- To undertake an estimate of the value of pension benefits at the individual’s preferred retirement age based on continued scheme membership and contributions, and to estimate the value if contributions or accrual were to cease by 5 April 2014.
- To consider what options exist in relation to drawing benefits at a date earlier than the preferred retirement date with a view to potential tax saving.
- To consider and comment on the potential tax advantages or otherwise of registering with HM Revenue and Customs for protection of the existing lifetime allowance prior to 6 April 2014.
- To provide guidance as to the appropriate type of protection to be applied for and the way in which this can be achieved.
Graham Cooke, senior consultant and business development manager at JLT Wealth Management (pictured), said: “Building up pension benefits that potentially exceed the lifetime allowance does not make sense [because] the ‘recovery tax’ payable on the excess is currently 55% (for example, 10% higher than the maximum current rate of income tax).
“Those with several and/or large pension pots will have the greatest difficulty in calculating the actual values, which are needed to determine whether additional tax charges are likely to apply.
“The JLT Lifetime Allowance Audit will highlight any potential issues and will help to ensure people are making the most of their pension savings.”