17 February 2012
HM Revenue & Customs' officials are surprised over the low
number of people who have applied to protect their pension fund
following the government's decision to cut the lifetime pension
allowance.
Last year, ministers set out sweeping changes to pension rules
which saw the annual allowance for tax-privileged pension saving
cut from £255,000 to £50,000 from April 2011.
The lifetime allowance will also be reduced from £1.8m to
£1.5m from April 6 2012. Savers have until 5 April to apply
for fixed protection to retain the £1.8m allowance for their
fund. Failure to apply for fixed protection will result in savings
above £1.5m being taxed at 55 per cent, potentially costing
investors hundreds of thousands of pounds.
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