DeVere calls for LTA abolition as two thirds face charges

Around two thirds of new clients at DeVere UK were potentially "sleepwalking into tax charges" for breaching the recently reduced LTA before seeking advice, according to DeVere's Mitch Hopkinson.

Hopkinson said: “Previously only the highest income earners were likely to be caught out by the LTA threshold. But thanks to repeated cuts in the value of the allowance – the latest in chancellor George Osborne’s 2015 Budget, in which it was cut to £1m – middle England is really being hit. A surprising amount of people simply don’t realise that they could be slapped with a tax bill for breaching the limit.

“£1m sounds like a lot, but when you take into account investment growth, you could find yourself inadvertently going over that threshold a lot easier and sooner than you might think.”

He added: “Like many, I am of the view that the lifetime allowance should be abolished. It sends out completely the wrong message about prudently saving for one’s retirement – and this could be detrimental to families and to the long-term, sustainable economic growth of the country."