News

Following an employee consultation with its Coats Crafts UK employees, the company has decided to wind down and close Coats Crafts UK. This decision does not affect deferred or pensioner members of the Coats Pension Plan.

Normally we send you your annual AVC statement around the end of June, however, Friends Life have a new computer system which is causing a delay printing the statements. At the moment they are unable to provide us with a timescale of when these will be issued. If you would like to see how your AVC fund is performing you can log on to the Friends Life website at www.friendslife.co.uk/membersite.

As of 30 June 2016, the Coats Pension Plan is closed to existing employees following the closure to new members in 2014. From 1 July 2016, Coats employees will be able to join the defined contribution (DC) scheme, operated on the Company’s behalf by Standard Life. More information about the new Coats DC Pension Scheme can be found by clicking here.

This will have no impact on deferred members or those whose pension is already in payment.

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.