The value of your pension savings is calculated differently depending on which section of Pace you have built up benefits in, as shown below. If you have benefits in more than one section, for example in both Pace DC and Pace Complete, the value of your benefits will be added together and then compared with the LTA.
The value is your DC account value at the time you take your benefits.
The value of your benefits is calculated as follows:
Pension coming into payment:
Annual pension amount x 20
For example, a pension of £1,000 a year x 20 = £20,000 (value for Lifetime Allowance purposes).
Tax-free lump sum:
The value that counts towards the LTA is the amount of tax-free lump sum.
Other pension benefits are valued as follows:
- Pension already in payment before 6 April 2006: For any pension that was being paid to you by any pension scheme before 6 April 2006, the value is calculated by multiplying the annual pension in payment by 25.
- Other pension benefits: If you have any pension benefits with another pension scheme that are not yet in payment, the scheme administrators should advise you of the value of those benefits.
Please note, any State Pension you receive is not taken into account when valuing your pension benefits for LTA purposes.