DC savings scandal: Why the lifetime allowance has to go

It was acceptable in the 80s

clock • 3 min read

Mark Canning is really hoping the Chancellor bites the bullet and scraps the lifetime allowance in next week's Budget speech...

Cast your mind back to the late 1980s - Kylie and Jason were topping the charts, Scotland had a World Cup final appearance to look forward to and HM Revenue & Customs introduced the forerunner of the lifetime allowance (LTA) - the pensionable salary "earnings cap". The purpose of this was to restrict the maximum amount of pension someone could accrue without becoming "overfunded". The original "cap" was £60,000 for the 1989/90 tax year - thus giving a maximum pension of £40,000 (i.e. two-thirds of the cap). For members of occupational defined contribution (DC) schemes, this pension...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Government confirms no compensation for WASPI women over state pension age changes

Government confirms no compensation for WASPI women over state pension age changes

DWP finds communication delays did not amount to financial loss

Martin Richmond
clock 17 December 2024 • 4 min read
Chancellor's move to pause Pensions Review 'deeply disappointing'

Chancellor's move to pause Pensions Review 'deeply disappointing'

Rachel Reeves has reportedly pressed indefinitely paused the review

Jenna Brown
clock 16 December 2024 • 3 min read
FCA targets pension transfers and SIPPs in major review

FCA targets pension transfers and SIPPs in major review

Regulator launches review of DC pension rules

Isabel Baxter
clock 13 December 2024 • 4 min read