The 2017 edition of your Pensions newsletter is available below, in which we will provide details of pension increases for 2017/18 and helpful information that may be relevant to your pension benefits.
The deadline for submitting 2016/17 self-assessment tax returns was 31 January 2018.
Declaring annual allowance charges for tax year 2016/17
In October 2017, Capita wrote to all members who have exceeded their 2016/17 annual allowance. It was explained that they would be liable for a tax charge if they do not have sufficient unused annual allowance to carry forward from previous tax years.
If this apples to you, please be aware that you will need to declare your annual allowance charge on your self-assessment tax return as you will have to pay a tax charge.
You can find more information about the annual allowance and paying the tax charge on GOV.UK.
Lifetime allowance scheme administrator look-up service
HM Revenue and Customs (HMRC) have launched a Lifetime allowance look-up service online allowing members to check their protection status. To do so, members will need their protection notification number and scheme administrator reference number which can be found through the 'view it online' link on Pension schemes: protect your lifetime allowance (GOV.UK).
Autumn budget 2017
After the last budget, the Lifetime Allowance (LTA) has increased from £1,000,000 to £1,030,000. This is used to determine whether there is a tax charge payable on your benefits.
Local Government Pension Scheme (LGPS) benefits are tested against the LTA when they become payable and the value of benefits (20 x pension plus any lump sum) must not exceed the LTA, otherwise tax may be payable. However, there are certain measures that can be taken to protect benefits and members should contact the Pensions Team if they are concerned they may exceed the LTA.
2018 pensions increase
HM Treasury confirmed that the rate of Consumer Price Inflation (CPI) for September 2017 was 3.0%. The CPI is used to determine the increases applied to the annual pension accrued each year whilst an active member of the scheme, as well as the increases applied to pensions whilst in deferment (frozen) and pensions in payment.
HMRC’s Countdown bulletin 30
As part of the ending of contracting-out, pension schemes have been carrying out a reconciliation of their records to ensure the details held with regards to contracted out pension scheme membership agree with those details held by the Department for Work and Pensions (DWP).
Originally, DWP intended to send statements out to members setting out what details are held for them, however members are now expected to use the Check your State Pension (GOV.UK) service to check these details themselves.
If you are thinking about how to invest your retirement savings, follow the Pensions Regulators five steps to protect your pension.
The Government are introducing three measures to tackle pension scams:
- a ban on cold calling in relation to pensions
- limiting the statutory right to a transfer to a Financial Conduct Authority (FCA) authorised personal pension, an authorised master trust scheme and where a genuine employment link to the occupational scheme can be evidenced
- allowing only active companies to register a pension scheme (and de-registering pension schemes for dormant companies).