NEW TAX RULES: FIVE TIPS FOR PENSION SCHEMES

1. Encourage members to check payslips, pension statements or online pension accounts. This will help them understand how much they’re putting into their pension at the moment. High earners and members who were close to the old annual allowance limit might now be able to put in more money. Members who are already taking their pension but also saving into another pension elsewhere might also be able to put more money in with a more generous MPAA.

2. Talk to your administrator. Although no-one will have to pay tax on pensions over the LTA, it won’t be abolished completely until the 2024/2025 tax year, so administrators will still need to carry out LTA checks until then.

3. Help members think about what they’re aiming for. The PLSA’s Retirement Living Standards help members picture what their lives might be like once they stop working, and how much that life could cost them. Support members so that they know how much they’re putting into their pensions, what it’s likely to be worth when they retire, and whether they’re on track for the lifestyle that they want.

4. Give easy access to guidance. Under new guidance introduced last year, DC schemes’ trustees must ‘nudge’ members (or beneficiaries) to book a Pension Wise appointment or actively opt out of doing so, before they access their pension savings. This can help members understand the new allowances and think about the impact they might have on how and when they access their pot.

5. Check communications. Make sure any pensions booklets, websites and other communication channels take account of the new allowances and the freeze on the tax-free lump sum.