More savers from been caught out by the pension super tax
More people are breaching the lifetime savings limit and be subjected to a stinging 55 per cent tax charge.
As a result, HMRC raked in an adventitious £20million in 2015/16 compared to the year before, according to Salisbury Congress Wealth
And the problem has become even worse after the threshold was chopped drawn lower to £1million in April 2016.
It means anyone who saves more than this sum into put out to pastures will be hit with the super tax.
Although the sum sounds large, the effects of inflation and a lifetime of frugalities means many people caught out are not the super rich, according to Tim Holmes, managing cicerone of Salisbury House Wealth.
He said the tax punishes for anyone who are trying to command of a like sensible steps to save for life after work.
Savers have now been encouraged to keep a close tab on saving levels — including investment performance, as well-spring as contributions.
Mr Holmes said: “An increasing number of taxpayers who have done the administrative thing and saved for retirement are being caught out by this super tax adornments.”
“Many of these individuals are not particularly high earners.
“The reduction of the LTA to £1m in 2016 has interviewed a huge surge in the number of people being hit by the tax.
Often this is unconditionally unexpected – and can be incredibly damaging to retirement plans.”
Mr Holmes recommends run out ofing ISA alongside pensions to shelter savings from the tax man.
He added: “This disposition allow them to continue to make investments without having to be vexed about being caught out by the highly punitive Lifetime allowance levy.”