You may have learned about the announcement by the Chancellor of the Exchequer in yesterday’s budget statement regarding further taxation to pensions. On this occasion, he announced a proposed reduction in the lifetime allowance from £1.25m to £1m from 6 April 2016.
This change could affect anyone with earnings over £75k, i.e. this widens the net to capture Superintending ranks as well as Chief Officers, some of whom already faced this taxation. As a result, some of our members may face additional tax charges on the excess pension benefits above this level at 55% on lump sums, and 25% on pension.
We are not fully aware of the implications as yet as this is just hot off the press. We are having our tax people look at this further and we are expecting an update from our pensions lead, Chief Supt Tim Jackson of PSAEW next week.
When the picture is clearer we will notify you but anyone who anticipated retiring mid 2016 may require to seek some financial/tax advice.