Protect Your Pension from Tax

FUTURE PROOF: Savers with large pensions may find themselves facing a 55% tax charge on April 6 if they do not take precautions to protect their retirement nest egg

Hargreaves Lansdown 13 March, 2014 | 2:48PM
Facebook Twitter LinkedIn

This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Laith Khalaf, head of corporate research at stockbroker Hargreaves Lansdown explains how to protect your pension pot from unnecessary tax.

A 55% tax charge is never welcome, but savers with large pensions may find themselves facing just such a scenario from April 6 if they don’t take precautions. The total amount you can hold in a pension, called ‘the Lifetime Allowance’, will fall from £1.5 million to £1.25 million on April 6 2014. Anyone with pension savings above this cap may face a 55% tax charge if they don’t take action.

How to Protect Your Pension

If you think your pension will exceed £1.25 million, you can apply for protection from the fall in the Lifetime Allowance. There are two kinds of protection you may apply for.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Hargreaves Lansdown  Hargreaves Lansdown is a financial services company based in Bristol that sells funds and shares and related products via its website and through the post to retail investors in the United Kingdom.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement