News

Pensions News 36 is now available

In this issue: the end of contracting out, Coats 2015 financial results, pension arrangements for Active members, Scottish income tax, State Pension Changes…

View it online at our new My Coats Pension site (you will need to register if it’s your first visit): https://secure.coatspensions.co.uk

You can also view it online in the members-only section (you will need the secure area password): click here

The Lifetime Allowance (LTA) is the amount of pension saving a person can accumulate in their lifetime. From 6 April 2016 the LTA will be reduced to £1m (previously £1.25m). Two new forms of protection are being introduced for those whose pension savings may exceed the new limit:

• Fixed Protection 2016
  Giving a protected LTA of £1.25m.
• Individual Protection 2016
  Giving a protected LTA of between £1m and £1.25m

There is more information about these protections in Pension Schemes Newsletter 73 which is available on the www.gov.uk website.

The Annual Allowance (AA) is the amount of pension saving a person can accumulate over a year. The standard AA is £40k. A ‘tapered’ AA, which may affect those with incomes over £110K, also comes into force from 6 April 2016. The ‘tapered’ AA may be between £10K and £40K.

There is more information in the government policy paper Pensions tapered annual allowance, which is available on the www.gov.uk website.

A new ‘Money Purchase Annual Allowance’ (MPAA) also applies to people who access their Defined Contribution pensions in a flexible manner. Further Defined Contribution saving will be limited to £10K.

There is more information on page 3 of the Tax on your private pension contributions guidance, which is available on the www.gov.uk website.

Tax charges may apply where either the LTA or the AA is exceeded. It is recommended that you seek regulated financial advice when making decisions about your pension planning.

We previously confirmed we would provide an update on the Government’s consultation into whether tax relief on pensions should change, and we can now advise that no changes to tax relief were announced in the March 2016 budget.

The latest edition of Pensions News is being issued to all our members and should be delivered in early December.

Please note that the newsletter, and other documents containing member-related information, can now be found in a secure, members only area of the website. To access the information in the members only area, you will need a password. Members can access this document by entering their password at our members’ page – please click here. If you are a Plan member and you do not have a password, you can call 0141 207 6800, or email pensions.services@coats.com. You will need to give your Plan member number (or NI number) and date of birth.

This edition of Pensions News refers to the pension increase – if you’d like to know more about the increase, please click here. As above, you will need the password to access this page.

If you are still receiving your copy of Pensions News by post, please remember that you can save the Plan money – and access Pensions News earlier – by choosing to receive future editions of Pensions News and other general correspondence electronically. Simply click here to subscribe to electronic communications. If you have already subscribed, thank you.

The summer Budget contained a few measures that our members might like to know about.

Annual Allowance (AA)
From April 2016, the AA – the limit on defined contributions (DC) contributions you can pay in a year, or your defined benefit (DB) pension can grow in a year, before being subject to tax – will be reducing for those with incomes over £150,000 a year. As ever, the rules surrounding this are complex and you can find out more about this from the BBC news website by clicking here.

Lifetime Allowance (LTA)
Although already signposted in the March 2015 Budget, it was confirmed that the LTA will be reduced to £1m from April 2016. It will increase each year in line with the Consumer Prices Index (CPI) from 2018.

Tax relief on pensions
The Government are launching a consultation to review whether the current taxation treatment of pension saving is both understood and suitable. We will update you on this when more information is available. This is expected to be early next year.

Personal Taxation Allowance
This is increasing to £11K from April 2016 for everyone, which means that older pensioners will see an increase to their frozen personal allowance for the first time in years.

We will keep you informed of any further changes.

The latest edition of Pensions News is being issued to all our members and should be delivered in early June.

Please note that the newsletter, and other documents containing member-related information, can now be found in a secure, members only area of the website. To access the information in the members only area, you will need a password. Members can access this document by entering their password at our members’ page – please click here. If you are a Plan member and you do not have a password, you can call 0141 207 6800, or email pensions.services@coats.com. You will need to give your Plan member number (or NI number) and date of birth.

If you are still receiving your copy of Pensions News by post, please remember that you can save the Plan money by choosing to receive future editions of Pensions News and other general correspondence electronically. If you have already given us your email address, thank you.