daft DB question

mpension

Apologies in advance, but...

Does a DB pension make up part of the LTA?

The reason I ask is, there's no real pot, its just an agreed amount they pay me?

Thanks you in advance and sorry if its daft. trying to learn, but cannot find the answer.

Regards

hugheskevi

Does a DB pension make up part of the LTA?

Yes - valued at 20 times annual pension plus any lump sum.

232607

Yes it does.
Whatever your annual DB pension is they times it by 20 for the purpose of the LTA calculation.

kinger101

Yes - DB counts. I'm not sure of the exact calculation, but believe it's somewhere around 20x annual pension + lump sum.

mpension

Many thanks - appreciated.

Albermarle

Worth pointing out that this fixed 20X calculation , underestimates the value of a DB pension significantly and in reality should be at least 25X and probably more .
Also if you take a DB pension early and have a reduced annual pension , it still only counts 20X this reduced sum , so even better for LTA purposes.

pennystretcher

More about LTA here: https://www.gov.uk/tax-on-your-private-pension/lifetime-allowance