Lifetime allowance charges

Published by Bhargaw Buddhdev, Lisa Lawson on

We were appointed by an executive who faced the prospect of a lifetime allowance (LTA) charge because her benefits at normal retirement date would exceed the LTA.

We outlined that she would be able to reduce the LTA charge in a number of ways:

  • by drawing a higher pensions commencement lump sum 
  • or by retiring early 
  • or by drawing benefits early and continuing to work 

Benefits

These options did not increase the employer’s costs but reduced the LTA charge for the executive.