2014 £1.5m LTA protection clarification

fizio

I am currently at £1.2m LTA so was trying to figure out which of the 2014 fixed/individual protections I should apply for - or should I be looking at the new 2016 £1.25m protection whenever that gets announced.
As I understand it, the deadline for 2014 fixed protection has passed but 2014 individual is available till 2017?
I am struggling to see why I would not apply for the 2014 IP (assuming i qualify) as I am almost guaranteed to be above 1.25 as have approx 5 years to early retirement (57ish)

EdSwippet

IP14 is only available to folk who were over £1.25m on 5 Apr 2014, so unless you were invested in some lousy funds then this is probably not you.

IP protects you only up to your current balance (so £1.2m then, or whatever you have come 5 Apr 2016), but allows you to continue contributing. To apply for IP you must already have a balance above the reduced LTA. FP protects you up to the old allowance, but disallows future contributions. You don't need to be over the reduced LTA.

Assuming IP16 and FP16 follow the (sad) pattern on this, you should probably apply for both. Also at least consider stopping new pension contributions now. Maybe also consider simply retiring earlier than planned.

Disclaimer: I'm new to this and struggle with it, so take the above with a large vat of DYOR.

fizio

EdSwippet wrote: »

IP14 is only available to folk who were over £1.25m on 5 Apr 2014, so unless you were invested in some lousy funds then this is probably not you.

Disclaimer: I'm new to this and struggle with it, so take the above with a large vat of DYOR.

I knew there would be a catch somewhere so looks like I will have to await the details of the 2016 FP/IP and apply for that.
I don't really want to retire too early as half my pension is DB scheme and it reduces for every year taken early so don't want to lose too much.
Don't really want to stop contributing either as it seems like I am refusing free money from my employer..

coyrls

haf63 wrote: »

I knew there would be a catch somewhere so looks like I will have to await the details of the 2016 FP/IP and apply for that.
I don't really want to retire too early as half my pension is DB scheme and it reduces for every year taken early so don't want to lose too much.
Don't really want to stop contributing either as it seems like I am refusing free money from my employer..

Do the sums, it may be worth paying the tax, it's not 100% after all.

Daniel54

haf63 wrote: »

Don't really want to stop contributing either as it seems like I am refusing free money from my employer..

If you can no longer contribute to a pension,it is worth checking with your employer if they will pay you their contribution as salary in lieu.

I receive the standard salary percentage they were putting into the pension ( so excluding any additional matched employer contributions) less the 10% NI they were saving via salary sacrifice

fizio

Daniel54 wrote: »

If you can no longer contribute to a pension,it is worth checking with your employer if they will pay you their contribution as salary in lieu.

I receive the standard salary percentage they were putting into the pension ( so excluding any additional matched employer contributions) less the 10% NI they were saving via salary sacrifice

Sadly my employer is not as flexible.. currently..

Appreciate the feedback though