With effect from 6 April 2012, the following changes apply. Details are provided for information only: they reflect Selftrade’s understanding of the legislation and Treasury guidance and may be subject to changes. You should check with your pension provider or financial adviser for full details and to determine how they may apply to your personal circumstances.

Lifetime allowance: reduced to £1,5m subject to transitional ‘Fixed Protection’ arrangements. (‘Fixed Protection’ application must have been made by 5 April 2012. Refer to your pension trustee/administrator or financial adviser for further details.)

Small pension pots: where your total pensions savings do not exceed £18,000 you may take them as a lump sum, with a proportion being subject to income tax at your marginal rate.

Additionally, subject to certain conditions being met, an individual pension plan worth less than £2,000 can be paid out as a lump sum to individuals ages 60 or over regardless of the overall total of their pension savings. However, any one person can only have a maximum of two lump sum payments in their lifetime. Refer to your pension trustee/administrator or financial adviser for further details.

Maximum pension commencement lump sum: 25% of the lifetime allowance, currently £375,000 (£450,000 where the £1.8m LTA appies).

Protected rights: protected rights (rebates into your personal pension of monies that would have otherwise provided with the State Earnings Related Pension Scheme (SERPS) supplement to your state pension) will be treated as any other pension benefit.

The Pensions Advisory Service

HMRC

HMRC guidance on annual allowances