Pensions Update

The utterances from the Coalition Government in terms of Pensions Reform indicate that the following may happen:

• Maximum annual contributions of £50,000 with tax relief at the highest rate paid.
• Carry forward unused relief for up to 3 years.
• Lifetime Allowance reduced to £1.5m from the current £1.8m.
• For Defined Benefit schemes the factor used to define the amount of increase in benefit each year to be changed to 16 times from the current 10 times. This means that a member gaining an extra £1,000 of benefit would be deemed to have £16,000 set against their annual contribution.
• Auto enrolment into pension schemes to go ahead for all employees earning more than £7,475, after 3 months' service. The National Employment Savings Trust (NEST) will be the default pension scheme unless a suitable pension scheme is in place already.
• A flat, not means tested, State benefit of £140 per week will replace the OAP, SERPS, S2P and Graduated State Pension Scheme.

None of this is set in stone and we will of course keep you informed as matters progress. In the meantime if you would like to consider your options or review your current pension arrangements, either personally or in respect of a group scheme, please e mail info@lycetts.co.uk