Pension - Lifetime Allowance

atomix15

If I retired early with a lifetime allowance at 99.83% and since retiring i have taken up a new job is it worth joining their pension scheme or is it better to opt out. My understanding is I'll take a tax hit on the new pension as it will go above the lifetime allowance however this is negated as the employers contributions are higher? 

Marcon

atomix15 said:

If I retired early with a lifetime allowance at 99.83% and since retiring i have taken up a new job is it worth joining their pension scheme or is it better to opt out. My understanding is I'll take a tax hit on the new pension as it will go above the lifetime allowance however this is negated as the employers contributions are higher? 

If that's the case, you've probably answered your own question. Two things worth bearing in mind:

1. you can always take the loot from your new scheme just before it hits the £10,000 mark, using the 'small pots' regime, which will use 0% of the LTA. You can do this up to 3 times with personal pensions, effectively increasing the LTA by up to £30K. No limit on the number of times you can do it with an occupational scheme
2. the LTA might increase before you come to draw your benefits from your new scheme.

coyrls

On point 2, the OP could only get 0.17% of any revised LTA.

Albermarle

It is not just the employers contributions . Your own contributions will receive tax relief.

If you happen to be a higher rate taxpayer , the tax relief alone will cover the LTA charge .