Valuing your Pension Benefits for Lifetime Allowance (LTA) purposes
How your pension benefits are valued for LTA purposes depends on the type of pension scheme.
Your PACE pension benefits are valued as follows:
Pension coming into payment – The value of any PACE pension for LTA purposes is calculated by multiplying the annual pension by 20.
For example:
Pension of £1,000 p.a. X 20 = £20,000 (value for LTA purposes)
Tax-free lump sum coming into payment – the amount of the tax-free lump sum will be used as the value for LTA purposes.
Additional Voluntary Contributions (AVCs) – If you pay AVCs, the actual fund value will be used as the value for LTA purposes.
Other pension benefits are valued as follows:
Pension already in Payment before 6 April 2006 – For any pension which was being paid to you by any pension scheme before 6 April 2006, the value is calculated by multiplying the annual pension in payment by 25.
Other Pension Benefits – If you have any pension benefits with another pension scheme which are not yet in payment, the scheme administrators should advise you of the value of those benefits.
Please note, any state pension you receive is not taken into account when valuing your pension benefits for LTA purposes.
