NEWS   |    April 17, 2024

Beth Brown comments in Professional Pensions on the abolition of the Lifetime Allowance

The Lifetime Allowance (“LTA”) framework was removed from pensions tax legislation on 6 April 2024, following the chancellor’s announcement in the 2023 budget.

Trustees and employers should be taking a closer look at their scheme rules to see if any updates need to be made.

Commenting in Professional Pensions, partner Beth Brown highlighted that this would throw into focus any previous rules that would have prevented members exceeding LTA, such as capped benefit accrual, which employers may want to remove.

“Or alternatively they may want to make sure the cap doesn’t fall away, given the new legislation, and significantly increase the scheme liabilities.” In reality, it may be that abolishing the LTA does not affect many scheme members.

She continued that “As is often the case in pensions, communication is key. It is important to check that there are no statements in scheme communications or forms that are now misleading, for example explanations about benefit options or what members can and can’t do.”

Read Beth’s comments in Professional Pensions, here.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.

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