Act Fast to Avoid Pension Tax Bill

The Government is reducing the amount you are allowed to save into a pension over your life time from £1.5 million to £1.25 million from April

Emma Wall 17 January, 2014 | 11:44AM

Pension savers are being warned they could face an avoidable tax bill unless they act now. The Government is reducing the amount you are allowed to save into a pension over your life time from £1.5 million to £1.25 million from the new tax year which starts on April 6, 2014.

But many savers are unaware of how much they have saved for retirement, due to a change in working culture. In the past, workers remained with a single employer for life, making it easy to track their pension savings.

Now, according to Standard Life workers have an average of 11 employers over their work life span, which can make documents considerably harder to collate. If you are unaware that you are approaching or have exceeded the new maximum threshold of the Life Time Allowance, and do so in the new tax year – you could face a hefty tax bill.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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