Investors hoping to put the maximum into their pensions have just weeks to take action, tax experts at international accountancy firm Mazars in Birmingham are warning.
Tax partner Ann Bibby said: “The standard lifetime allowance is reducing from £1.8 million to £1.5 million with effect from April 6, 2012.
“This means that the maximum pension fund that you can accumulate from all of your pension schemes cannot exceed £1.5 million – equivalent to a pension benefit of £75,000 if you have a final salary pension arrangement – after April 6, 2012.
“If you exceed this limit you will pay tax on the excess – up to 55 per cent.”
But, she said, opportunities still existed for those with significant pension pots to protect their pension funds against this significant tax charge, and continue to benefit from further investment growth.
It was also possible to make further contributions to enhance retirement benefits.
Ms Bibby said: “If your pension funds total in excess of £1 million, or a £50,000 per annum final salary pension benefit, or you believe your pension funds may increase in value to above £1.5 million by the time you come to take benefits then now is the time to take action.
“You should talk to an experienced pensions consultant as soon as possible.”
