The lifetime allowance is the overall limit that you can build up in pension benefits before a lifetime allowance tax charge applies. In 2011, the lifetime allowance was at its historical highest limit of £1.8m but was gradually reduced to £1m in 2016 from where it would be increased by CPI each year.
With a lifetime Cashflow Modeller, it is crucial that lifetime allowance is handled correctly and applied within a client’s current position to illustrate when an expected standard of living may have to be adjusted to cope with this potential tax charge of up to 55%.
It is becoming increasingly important to have the functionality to look at ‘What if’ your client crystallised pensions in a different order or by a different withdrawal style or maybe they achieved a different investment growth?
These are some of the most important questions advisers are facing today and FinCalc’s latest addition provides the tools to help answer these questions and clearly show clients the impact of lifetime allowance in their financial planning.
FinCalc’s Cashflow Modeller now includes:
Including lifetime allowance within a lifetime Cashflow Modeller will save so much time for advisers and follows on from the inclusion of full income tax calculations. The impact of any lifetime allowance tax charge is clearly detailed in the results output and is extremely powerful for advisers when helping clients move from pensions accumulation to decumulation.
FinCalc - In the Press
This has been referenced in Financial Planning Today and in Professional Paraplanner!
About the author
Gavin Shears
Senior Product Consultant