AA and LTA survey - our analysis

Published by Bhargaw Buddhdev on

High earners could find themselves footing large tax bills as a result of reduced pensions annual allowance (AA) and lifetime allowance (LTA).

The level of tax relief - AA - is tapered to as low as £10,000 for those with total taxable income and value of pension savings in a defined benefit (DB) scheme or contributions in a defined contribution (DC) scheme exceeding £210,000.

The LTA has also reduced to £1million from 6 April 2016.

Barnett Waddingham has carried out a survey of how companies have geared up to assist their high earners mitigate the impact of the tapered AA and the reduced LTA from 6 April 2016.

The main finding of the survey is that, of the responses received, a vast majority of companies will offer cash in lieu of pension.