In the section we cover additional Pathways advice services for workplace pensions, including:
1. Lifetime Allowance Planning
2. Pension Seminars
3. Pension & Divorce
4. Overseas Pensions
Lifetime Allowance Planning
The 2018/19 Lifetime Allowance is £1,030,000 and is indexed by CPI (Consumer Price Index) each year.
The LTA is the maximum amount of pension savings people can make tax-free over their lifetime. At retirement you can normally take 25% of your fund tax free. Anything over this is taxed at your marginal rate of income tax. If your pension savings are above the LTA, any excess will be subject to an additional tax charge of 25% if taken as income or 55% if taken as a lump sum.
Many won’t see this additional tax charge coming. Those that have a defined benefit pension and are now in defined contribution schemes may be particularly vulnerable to the hidden risks of a lifetime allowance charge. Defined benefit pension will be valued at 20 times the gross annual pension but as pensions in deferment are subject to ongoing revaluation, deferred defined benefit members could be unwittingly overfunding their defined contribution pension.
Some protections will be available to allow people to protect their pension LTA against a higher allowance. By carrying out a 'Pathways pensions wealth check’ we can help members work out how much pension wealth they have amassed so far, and how probable it is they will breach the LTA at retirement. Our analysis will help members decide whether to carry on paying contributions, apply for protection or take a different course of action.
Our pension seminars can be tailored to your scheme and member requirements. Whether your members need guidance on the choices under pension freedoms, pre-retirement glidepath choices, pension transfers, lifetime allowance planning or anything else pension related, we can build a seminar to suit. Our seminars aim to educate members on the key factors and provide suggestions for next steps and where to seek more information, guidance and/or advice.
Pensions and Divorce
Following the introduction of pension sharing on divorce, specialist pension advice will be required at various stages and will depend whether a client is the 'debit spouse' or 'credit spouse'. Initial advice will be required on the implications of each option i.e. offsetting, earmarking and pension sharing.
After the divorce the 'debit spouse' will require advice to resolve the problems created by depletion of their pension benefits.
For the 'credit spouse' advice will be needed on the options of how and where to hold the pension credit.
At Intelligent Pensions, we have the experience and expertise to provide advice to either 'debit' or 'credit' spouses and will analyse all the potential options to identify a solution that is in the best interests of the member.
With over 400,000 people every year choosing to leave the UK and join the 5.5m expats already living abroad, it is hardly surprising that specialist and often favourable overseas pensions and QROPS have become of growing interest.
QROPS stands for Qualifying Recognised Overseas Pension Schemes and were launched on April 6, 2006 as part of Pensions simplification. QROPS were subject to new legislation from 6 April 2012. A UK Tax relieved pension fund can only transfer overseas to a scheme with a QROPS Certificate.
If you have members living abroad or planning to emigrate our QROPS service will evaluate the benefits of transferring to a QROPS and finding the most appropriate overseas jurisdiction, trustees and investment solutions to meet their requirements.