Service Pension and LTA

[Don Coyote]

I left the RAF in 2000 after 16 years and took maximum commutation, my pension jumps up next year at 55.

Does anyone know if this has an impact on my personal Lifetime Allowance given that the pension was in payment prior to 2006?

I did ring the Veteren pension number but the person I spoke to did not sound too confident and I thought I might get a second opinion from here.

Thanks in advance

[MightyGem]

As the lifetime allowance is £1Million, do you think it's likely?

[k3k3]

Depends how long a lifetime is.

[Don Coyote]

It is surprisingly easy to get close if you are in a final salary scheme and make additional payments.

[Schnowzer]

Having left as a Sqn Ldr I need to get to 97 by my calculations to reach the LTA. I'll be back in 2059 to give the answer😉

[Sandy Parts]

as I understand it, it is a measure to stop business fat-cats taking their 'salary' as a pension contribution to avoid paying the Income Tax and NI due on it.
As long as you are not still making any pension contributions (you might be still paying in to a SIPP for example), you are not adding to the pot that is limited by the LTA.
You should get a statement from any pension that you actively contribute to saying how much of your LTA it has accounted for (you need to add them up if more than one).
If you are just a 'taker' not a 'giver' (so no money going in to a pension, only money coming out), you've already made your lifetime contributions.
Feel free to correct me if I've misunderstood the system (it is more complex than a dimmer switch )

[Background Noise]

Originally Posted by Schnowzer

Having left as a Sqn Ldr I need to get to 97 by my calculations to reach the LTA. I'll be back in 2059 to give the answer😉

That's not quite how it works - it's the value of your pension 'pot' - or in our case, it is something like 20 times the initial annual pension, plus any lump sum. So you have already used up a certain amount of your LTA. If you have another pension scheme, that has to be added. The limit would be achievable with 2 well-paid pension schemes.

[Background Noise]

Originally Posted by Don Coyote

I left the RAF in 2000 after 16 years and took maximum commutation, my pension jumps up next year at 55.

Does anyone know if this has an impact on my personal Lifetime Allowance given that the pension was in payment prior to 2006?

I did ring the Veteren pension number but the person I spoke to did not sound too confident and I thought I might get a second opinion from here.

Thanks in advance

As I understand it, the value of your service pension was set when you started to take it, using the formula above you can work out roughly how much of your LTA has been used. If you have a current pension scheme, that pot value has to be added to calculate your LTA.

If you think you might be close it would be worth joining the Forces Pension Society - they helped me more than SPVA ever did. There was some way you could apply to protect your LTA but that is beyond my pea brain.

[Don Coyote]

Background noise, thanks for that. I wasn't sure whether it was the initial rate or the age 55 rate that was used. If it is the initial rate then I can contribute a little bit more before I reach the limit.

I will look into the Forces Pension Society as well, thanks for the tip.

Sandy Parts, I can access LTA statements for all my other pensions, it is just my service pension that I can't find details for and it is that one that might push me over the limit.

[ForcesPensionSociety]

Originally Posted by Don Coyote

I left the RAF in 2000 after 16 years and took maximum commutation, my pension jumps up next year at 55.

Does anyone know if this has an impact on my personal Lifetime Allowance given that the pension was in payment prior to 2006?

I did ring the Veteren pension number but the person I spoke to did not sound too confident and I thought I might get a second opinion from here.

Thanks in advance

As you retired before ‘A-Day’ (ie when Lifetime Allowance (LTA) was introduced), your pension has never been assessed for LTA – therefore your reaching Age 55 and having your annual inflationary applied to your pension income will trigger your first BCE (Benefit Crystallisation Event). If you join the Forces Pension Society they can offer a full explanation of how this will work for you.

[Don Coyote]

ForcesPensionSociety, many thanks for that, I will look up the joining details.

[fin1012]

I just hit my 55th birthday and was surprised that when Equiniti wrote to me with my new figures, they had also increased my LTA %age figure to reflect the amount I had commuted. I didn't know that was how it worked. Still way below the million figure sadly

[Jambo Jet]

Originally Posted by fin1012

I just hit my 55th birthday and was surprised that when Equiniti wrote to me with my new figures, they had also increased my LTA %age figure to reflect the amount I had commuted. I didn't know that was how it worked. Still way below the million figure sadly

Out of curiosity what percentage rise did you get and I am assuming you commuted the maximum