LGPS Annual Allowance

Redsox64

I’m still trying to work out my annual allowance. I know I multiply the pension increase amount for the tax year by 16 and add lump sum increase and any AVC contribution. However I cannot fathom how I work out what that pension increase amount is. I have paid in since 1983 so have some at 1/80, some 1/60 and now 1/49 CARE. Can I get this information from my annual statements if so what am I looking for? It also doesn’t help that I won’t get the statement for this tax year until August. Any help gratefully received thanks. 

Silvertabby

Yes, it will be on your annual benefit statement.  Unfortunately, this won't be available until later in the year, due to the time needed to input the year-end information from scheme employers etc.

Very few LGPS members are in the position of having to declare AA for tax purposes, so you may be able to ask your LGPS administrator for these figures early.  Covid permitting.

Redsox64

Silvertabby said:

Yes, it will be on your annual benefit statement.  Unfortunately, this won't be available until later in the year, due to the time needed to input the year-end information from scheme employers etc.

Very few LGPS members are in the position of having to declare AA for tax purposes, so you may be able to ask your LGPS administrator for these figures early.  Covid permitting.

Thanks Silvertabby. When looking at my statements is it the accrued pension figure for that tax year that I compare with previous year and multiply the difference by 16? Then add difference in lump sum and any AVC? Thanks for your help

Silvertabby

Redsox64 said:

Silvertabby said:

Yes, it will be on your annual benefit statement.  Unfortunately, this won't be available until later in the year, due to the time needed to input the year-end information from scheme employers etc.

Very few LGPS members are in the position of having to declare AA for tax purposes, so you may be able to ask your LGPS administrator for these figures early.  Covid permitting.

Thanks Silvertabby. When looking at my statements is it the accrued pension figure for that tax year that I compare with previous year and multiply the difference by 16? Then add difference in lump sum and any AVC? Thanks for your help

Usually, it's only the very high earners who breech the AA/have to declare the excess for tax purposes, and the LGPS I worked for did these calculations for the (very few) fund members affected.

Have you breeched in previous years?

hugheskevi

Redsox64 said:

When looking at my statements is it the accrued pension figure for that tax year that I compare with previous year and multiply the difference by 16? Then add difference in lump sum and any AVC? Thanks for your help

You can request the information by asking your pension administrator for a Pension Saving Statement. This has to be provided by 6 October following the end of financial year and shows the pension inputs in all of your schemes for the current and previous 3 years. You should also be able to request earlier years if necessary, as up to the previous 6 years can be required depending on pattern of contributions to calculate available carry-forward.

You can try to piece it together yourself by looking at past Annual Allowance statements if you like, but there are also inflation adjustments and 1-5 April to take account of, so you will not be able to get the exact figure.

To estimate current year you need to take pension at start of year and forecast what it will be at end of year by looking at salary for the year and how each pension is calculated.

billywhizz1966

I was provided with my information on request to the administrators of the scheme (the County Council). They also confirmed my unused previous 3 years annual allowance which I have used this year having moved out of LG. As silvertabby says unless on a very high salary (way over £100k p.a you wont get near to suing your annual allowance it would seem)  

AlanP_2

Redsox64 said:

I’m still trying to work out my annual allowance. I know I multiply the pension increase amount for the tax year by 16 and add lump sum increase and any AVC contribution. However I cannot fathom how I work out what that pension increase amount is. I have paid in since 1983 so have some at 1/80, some 1/60 and now 1/49 CARE. Can I get this information from my annual statements if so what am I looking for? It also doesn’t help that I won’t get the statement for this tax year until August. Any help gratefully received thanks. 

It isn't too difficult to work out what your LGPS pension benefits are gfoing to be for the current tax year. Your calculation will be slightly out but should be near enough to make no difference.

You know the accrual rates, you know your length of service for each scheme and you know your salary. You may have to estimate for any pay rise and then adjust when it is confirmed.

Use the above data in Excel and work out what the benefit at 31/03/22 will be. Previous statements and / or your scheme admins should tell you what the benefits value for AA purposes was at 01/04/21.

Then use the calculator here https://www.lgpsmember.org/more/aa-quick-check-tool.php to work out your AA value (including AVC contributions).

As mentioned above the 1-5 April bit will throw the calculations off a fraction so the usefulness depends on how accurate you need it to be. 

As silvertabby says unless on a very high salary (way over £100k p.a you wont get near to suing your annual allowance it would seem)  

The other reason is if you get a significant payrise.

Silvertabby

AlanP_2 said:

Redsox64 said:

I’m still trying to work out my annual allowance. I know I multiply the pension increase amount for the tax year by 16 and add lump sum increase and any AVC contribution. However I cannot fathom how I work out what that pension increase amount is. I have paid in since 1983 so have some at 1/80, some 1/60 and now 1/49 CARE. Can I get this information from my annual statements if so what am I looking for? It also doesn’t help that I won’t get the statement for this tax year until August. Any help gratefully received thanks. 

It isn't too difficult to work out what your LGPS pension benefits are gfoing to be for the current tax year. Your calculation will be slightly out but should be near enough to make no difference.

You know the accrual rates, you know your length of service for each scheme and you know your salary. You may have to estimate for any pay rise and then adjust when it is confirmed.

Use the above data in Excel and work out what the benefit at 31/03/22 will be. Previous statements and / or your scheme admins should tell you what the benefits value for AA purposes was at 01/04/21.

Then use the calculator here https://www.lgpsmember.org/more/aa-quick-check-tool.php to work out your AA value (including AVC contributions).

As mentioned above the 1-5 April bit will throw the calculations off a fraction so the usefulness depends on how accurate you need it to be. 

As silvertabby says unless on a very high salary (way over £100k p.a you wont get near to suing your annual allowance it would seem)  

The other reason is if you get a significant payrise.

To be fair, I did say 'usually'.  Another possible trigger could be a large Ill Health enhancement, unless the ill health approval specifically states that the AA increase is exempt.