Pensions

Question 1

What is the lifetime allowance?

Answer 1

The lifetime allowance is a rule that allows you to draw the lower of

25% or your pension tax free or
25% of your available lifetime allowance which is 1,073,100 - this can be reduced if already crystalized some of your pension

So if crystalise 100k uses up 100k of allowance and 25k is tax free 75k is taxable

Also separate note - age 75 if die before all get given tax free, after 75 taxes at beneficiary tax rate

Note mpaa money purchase annual allowance - if go draw money out this is max can contribute yearly at £10,000

Carried forward - can carry forward u used previous allowance from previous 3 years i.e 60k or 100% of earnings - note last 3 years allowance was 40k not 60k

Additional permitted subscription-

If marries or spouse does and has X amount in an isa, I can contibute x into my isa, do not have to but can, carries forward 3 years. I.e leave 200k, year 1 - 100k, year 2 50k and year 3 50k