Guard your pension

The Treasury is clawing extra tax from your pension savings. Cavendish Medical financial planners’ Patrick Convey shows how to avoid excess tax payments.

According to Government figures, the Treasury has increased by 80% in the last year the tax it collected from savers breaching the lifetime allowance. Over the last five years, the tax revenue has tripled.

Senior couple discussing financial plan with consultant

Yet there are still many doctors who will walk blindly into the lifetime allowance tax trap without taking some simple steps to mitigate their tax liabilities.

The lifetime allowance (LTA) limits the total amount which can be paid into a pension while benefitting from tax relief. In 2015-2016, HM Revenue and Customs (HMRC) gained £36m from individuals exceeding the allowance – the year when it was reduced to just £1m, catching many savers unaware.