Lifetime Allowance Certificate

lindabea

One of my pension providers is asking me if I have an LAC and if so to send it to them. I've never heard of this - I'd be grateful if someone can explain what this is and how to obtain it. Would getting one be of any benefit to me when buying an annuity?

dunstonh

If your pension is tracking towards exceeding £1.5 million then you may well have one. You would have had to applied for enhanced or primary protection (following the 2006 rules changes) or, as I am doing on two cases at the moment, apply for the new fixed protection following the finance act 2011 changes that recently got Royal Assent.

Would getting one be of any benefit to me when buying an annuity?

It is too late for primary or enhanced protection but fixed protection has just become available until the end of the year. Is your pension on track to exceed the lifetime allowance?

RichandJ

Is this particular pension just coming into payment ?

If so the provider have to satisfy themselves that the benefit will not take you over the Lifetime Allowance. If you have taken other pensions since 6 April 2006 you should have been notified what %age of the LTA they represented (and should also receive a reminder once every tax year). Sounds to me that that's what they're after.

If you have other pensions in payment which started before 6/4/06 they'll need to know the amount.

If neither just advise them of the fact.

lindabea

dunstonh wrote: »

If your pension is tracking towards exceeding £1.5 million then you may well have one.

It is too late for primary or enhanced protection but fixed protection has just become available until the end of the year. Is your pension on track to exceed the lifetime allowance?

My pension is nowhere near £1.5 million - do I take it therefore that it's nothing for me to be concerned about. Dunston, can you please what fixed protection is? I don't know if it would apply to me. If it's any help, the sum of all my pensions is in the region of £60K

dunstonh

My pension is nowhere near £1.5 million - do I take it therefore that it's nothing for me to be concerned about.

If it is never going to be then no, its nothing to be concerned with.

Dunston, can you please what fixed protection is?

It wont apply to you. It is for people that were going to be under the 1.8 million limit before it was reduced to 1.5 million. Its a tax relief/allowance that allows them to avoid extra tax because of the short notice change.

If it's any help, the sum of all my pensions is in the region of £60K

When it is your time to commence income, you will likely just do a consolidation and purchase an immediate vesting personal pension via an IFA (generically known as using the open market option). That is all that is required.

Aegis

lindabea wrote: »

My pension is nowhere near £1.5 million - do I take it therefore that it's nothing for me to be concerned about. Dunston, can you please what fixed protection is? I don't know if it would apply to me. If it's any help, the sum of all my pensions is in the region of £60K

It's not something that will apply to you, so don't worry about it.

Fixed protection applies to anyone with a pension that might be affected by the reduction in the lifetime allowance from £1.8M to £1.5M, so it's very rare.

calypso_rhapsody

When you say the sum of your pensions is about £60k - do you mean that is the value of your pension funds or the annual pension you expect to receive? If the latter, and that is after taking a 25% lump sum, then i think it might be possible that you fund is not that far short of £1.5m. But i have to say that Dunstonh knows an awful lot more about this than i do!!