New Tax Year... beware the Pension Tapered Annual Allowance

2019/20 tax year has arrived.

For many high earners, the complexity of the pension annual allowance will result in higher tax bills as those earning over £110,000 per year could find themselves subject to the Tapered Annual Allowance (TAA).

This is a complex issue and many high earners do not even know they are subject to the TAA ! a nasty tax bill awaits.

So, if you need advice on how to deal with the TAA, please call us.

Pension Freedoms

The introduction of Pension Freedoms together with the high transfer values currently being offered by Final Salary pension schemes has created an opportunity to review whether a transfer of your deferred final salary pension benefits to a private pension plan may be suitable.

As a rule of thumb a cash equivalent transfer value (CETV) of 20 x annual revalued pension is considered " fair value". We are seeing multiples in the range 25x - 40x annual revalued pension, with some even higher.

There is no cost to obtain a CETV as you have a statutory right to one CETV each year if you are more than 12 months away from the scheme retirement date. However, the CETV offered will only be valued for 3 months, so you'll need to take advice straight away!