Lifetime Allowance increase – April 2018
From 6th April 2018 the Lifetime Allowance will be increased in line with the Consumer Price Index (CPI) in the year to the previous September, and where this is not a multiple of £100 it will be rounded up to the next £100.
The CPI in September 2017 will determine what the increase will be with affect from 2018-2019 tax year. With effect from June 2017 the CPI is 2.6%. Should this remain the same until September we can predict what the Lifetime Allowance could be;
2018-2019: £1,026,000
Based on the following prediction table from Office of Budget Responsibility, the LTA for future years could increase thereafter to the following;
| Tax Year | 2017-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 |
|---|---|---|---|---|---|---|
| CPI | N/A | 2.60% | 2.30% | 2.00% | 2.00% | 2.00% |
| LTA Prediction | £1,000,000 | £1,026,000 | £1,049,600 | £1,070,600 | £1,092,100 | £1,114,000 |
http://budgetresponsibility.org.uk/faq/where-can-i-find-your-latest-forecasts/
The above figures are just assumptions and should not be taken as actual figures for future Lifetime Allowance Limits. As with previous years should clients take benefits over their Lifetime Allowance limits, then tax charges will apply.
Following the release of the CPI figures for September 2017 on 17th October 2017 we have written an updated blog which can be found here:
https://hartleypensions.com/lifetime-allowance-20182019/
