LTA ALLOWANCE

[posteee]

When calculating your future Lifetime Allowance (20* income I believe), . . . - If you were retiring 5 years early from the rmpp average salary pension scheme (and therefore taking a 25% reduction) - would your LTA be calculated from the income you were entitled to at full retirement age ( for example 20 times the income you would have recieved at age 65), or would it be 20 times the reduced income from the earlier age of 60 ?

[NorthernBoy]

When calculating your future Lifetime Allowance (20* income I believe), . . . - If you were retiring 5 years early from the rmpp average salary pension scheme (and therefore taking a 25% reduction) - would your LTA be calculated from the income you were entitled to at full retirement age ( for example 20 times the income you would have recieved at age 65), or would it be 20 times the reduced income from the earlier age of 60 ?

The lta will be based on the figures taken when you actually retire, not on any future possible retirement age.

[Steve_claret]

When you receive an estimate of your pension it will say what percentage each option is of your LTA and each option will vary slightly depending on how much tax free cash you opt to take. As you say for a DB scheme the LTA is calculated as 20x the total pension you have accrued. Whether you take this pension early or not is pretty much irrelevant for LTA calculation purposes. As the current LTA amount is over £1million then I don't think too many of us will need to worry about LTA's if only drawing an RM pension.