Changes to lifetime allowance for pensions
The coalition government announced at budget 2015 that it would reduce the lifetime allowance for pension savings from £1.25m to £1m from April 2016.
From 2018-19, the lifetime allowance will be increased by inflation (the Consumer Prices Index).
How will the changes affect me?
Members of classic who have, or expect to have, an annual pension of £43,500. Members who earn £77,000 and above with 45 years service may be in this position, as well as higher earners with shorter service.
premium, nuvos and alpha
Members of premium, nuvos and alpha who have, or expect to have, an annual pension of £50,000 (before lump sum commutation). Members who earn £66,000 with 45 years service, may be in this position, as well as higher earners with shorter service.
How will other pensions be affected?
Any external pensions, or Added Pension/ AVCs in the Civil Service Scheme, will also count within the lifetime allowance limit, so may cause members to exceed the allowance, even if their Civil Service pension is within the £1m limit.
HM Treasury has produced a factsheet which provides more information about the changes, and the details of the protections that will be available from HMRC.
Civil Service Pensions cannot provide advice to members about their personal tax arrangements.
The scheme can only confirm the value of your pension benefits. You might wish to talk to an Independent Financial Adviser about how the tax changes affect you.