Beware of the lifetime allowance on pension funds

It’s easier than you think to run up against the pensions lifetime allowance, says David Prosser.

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The Treasury is raiding large pension funds
(Image credit: 2017 Getty Images)

Although the government insists that the lifetime allowance (LTA)on pension funds is a tax that hits only a handful of very wealthy savers, it affects more people than you might think. HM Revenue & Customs is raising steadily more cash from the system: in the 2016-17 tax year, pension savers hit by the LTA handed over £110m three times more than in 2015-16.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.