Most people will not be affected by the AA tax charge because the value of their pension savings will not grow enough during a year, or if it does they are likely to have unused allowance from previous years that they can carry forward.
You are most likely to be affected if:
- You have a lot of membership or pension build up in the scheme and you receive a significant pay increase, and/or;
- You pay a high level of additional contributions (for example, additional voluntary contributions (AVCs), and/or;
- You have bought extra pension (for example additional pension contributions – APCs);
- You are a better paid member, and/or;
- You transfer into the LGPS from a previous public sector pension scheme under the preferential club transfer rules and your full time salary in the new job is higher than the full time salary in the previous job, and/or;
- You combine a previous LGPS pension benefit that was built up in the final salary section of the LGPS with your current pension account and your full time salary has increased significantly since leaving and re-joining the scheme, and/or;
- You have accessed flexible benefits on or after 6 April 2015
If you are unsure about whether you will be affected by the AA, you should seek independent financial advice from an advisor registered with the Financial Conduct Authority who has knowledge of the LGPS.
For help in choosing an independent financial advisor visit the Money Advice Service - choosing a financial advisor .