LCP responds to government plans to review tapered allowance
Pensions & benefits Policy & regulation
Responding to the announcement that the government plans to change pension rules for senior NHS clinicians, Bob Scott, Senior Partner at LCP commented:
"The tapered AA (and the Lifetime Allowance) has already killed off pension contributions for many high earners in DC schemes.
"Recognition of the difficulties that the tapered AA has created for DB schemes is very welcome indeed – but we do not underestimate the challenges in coming up with a method of taxing the accrual of DB pensions in a fair and practical way that is fiscally neutral. Whilst we are glad to hear that Treasury will be putting together proposals, we trust that (a) there will be proper consultation on the proposals and (b) changes will treat public and private sector workers with DB benefits equally and fairly. With the pensions taxation system creaking due to complexity piled upon complexity, we would hope that any changes would not exacerbate the problem.
"We will be interested to see if the Treasury proposes a retrospective change – our understanding is that doctors are currently trying to close off their pension tax charges due for their 2017/18 tax returns, let alone 2018/19 or 2019/20"