Pension LTA- What does this mean

ger2000

Hi MSE folks, just been provided these figures from my pension forecast,. Could someone explain there meaning if possible?. The figures are based on a commutation of pension figure provided. Thanks in advance

LTA- 1250000.00
Crystallised benefits 181940.00
Percentage of LTA used 14.5%
Value of LTA unused 1068059.66
LTA unused 85.44.

kidmugsy

LTA = Lifetime Allowance. If you build up your pension pot beyond the LTA there are cruel and unusual punishments.

ermine

Lifetime Allowance. Go over that and you don't get any tax advantage any more

ger2000

Many thanks, these figures appear to very high, how do I keep track of these so as not to receive any penalties?

mgdavid

ger2000 wrote: »

Many thanks, these figures appear to very high, how do I keep track of these so as not to receive any penalties?

For most people, keeping below one and a quarter million pounds in their pension scheme is not a problem. Do you think you might break that limit? For somebody on national average wage it equates to putting every penny they earn into the pension, every month for over 40 years !

kidmugsy

"Percentage of LTA used 14.5%" Just keep adding up the "%age LTA used" for each pension you have and check that they sum to less than 100%. For most people there's not the remotest chance of trouble on that front, though an acquaintance got to LTA by virtue of the effect of two late career promotions on his final salary pension.

mgdavid

ger2000 wrote: »

Many thanks, these figures appear to very high, how do I keep track of these so as not to receive any penalties?

For most people, keeping below one and a quarter million pounds in their pension scheme is not a problem. Do you think you might break that limit? For somebody on national average wage it equates to putting every penny they earn into the pension, every month for over 40 years !