Auto-enrolment surprise

Adrian Mee Mattioli Woods plc writes...

Before 6 April 2006 clients could almost create infinite pension funds. Pensions “A-day” replaced these rules with more stringent limits on contributions and a cap (the lifetime allowance LTA) on the maximum fund that could be accumulated.

In 2006 those clients not wanting to be penalised under this new regime could have opted for enhanced protection. This exempts them from any penal taxes on all future growth of their fund regardless of the LTA on the proviso that they no longer make or receive any pension contributions after April 2006.

Further changes resulted in the introduction of fixed protection in 2012 enabling clients to apply for protection albeit only up to the then LTA of £1.5 million but with the same provision that no further relevant benefit accrual could occur after April 2012.

Auto-enrolment compels every...