Greatly reduced lifetime and annual allowance limits could see high earners abandon pension saving, writes Mark Devlin. But he explains taking a tax hit might work in their favour…
While nobody likes paying more tax if the net benefit of doing so means you have more money in the long run, would you not grin and bear it? There is a lot of discussion at the moment about high earners in defined benefit (DB) or defined contribution (DC) schemes making the decision to leave the scheme to avoid paying the annual allowance (AA) and/or lifetime allowance (LTA) charges. But if these clients could see, with the help of a financial adviser, that there's potentially a net benefit to them paying the additional tax, would they still make the decision to leave? We can demon...
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