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No money for butter
Key points
- If the value of the pension fund exceeds the lifetime allowance on the date benefits are drawn a charge applies.
- In a final salary scheme the LTA charge would apply an annual reduction to the pension.
- Further complications for clients who have a final salary and a defined contribution pension.
- Deferring the pension may not be beneficial.
- Clients should discuss their pension options with their independent financial adviser.
‘When I am an old woman I shall wear purple’ is the famous first line of Jenny Joseph’s 1961 poem ‘Warning’ one of the UK’s favourite reflections on ageing. She promises to spend her pension on unsuitable things and have no money left for butter. Perhaps it is a sign of growing old – I am two years senior to the poem – that I seem to be reflecting more on pensions these days. My clients are growing old...
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