The 6th April, 2006 was an important date in the pensions industry, and it got tagged with the label ‘A-Day’. New tax regimes were brought in, and one was about statutory lifetime allowances for the maximum amount payable from approved pension schemes…and still being treated as tax-privileged. Basically this means the size of your pension fund.

Figures for five years were provided and these follow. Interestingly, pension funds over the amounts shown will have a ‘recovery charge’ of 25% on vesting. If all or part is taken as a lump sum this will be taxed at 40%. If taken as an income normal income tax rates will apply. The overall tax charge works out at 55% !    Figures:

Tax Year 2006/2007                          £1.50m

               2007/2008                          £1.60m

               2008/2009                          £1.65m

               2009/2010                          £1.75m

               2010/2011                          £1.80m

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