Pension plans

Our client Mr A is 71. His pension funds which are all defined contribution schemes with various life companies total £1.2m. He has taken the tax-free cash nothing further and the £1.2m is the value of the funds remaining.

He has 2014 lifetime allowance protection of £1.5m. Mr A does not need to draw any income from the pension funds and under the new rules he would like the funds to grow and be passed on for the benefit of his wife and then children.

Our question is straightforward. Is it the case that as the funds grow anything over £1.5m is skimmed off so to speak for a penal tax charge? And what happens to the rest of them?

Alternatively under the new rules can the whole funds grow uninhibited for the next 30 years until the children...