Shutterstock / Andrii Yalanskyi One person, a defined benefit (DB) member, is entitled to a guaranteed income from age 66 of £50,000 per year. The other, a defined contribution (DC) saver, buys an identical annuity at age 66 paying £40,000. Both are in good health and neither has lifetime allowance protection.
Which of the two is most likely to pay a lifetime allowance charge?
Logic would dictate that the person with the higher income – the DB member – would breach the £1,073,100 lifetime cap.However, the bizarre ‘multiplier’ used to turn a DB income into a notional fund to be tested […]
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