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BP Pensions - will the changes affect you?

Published on: 03/15/16 04:48:pm

We've heard recently that BP are making some changes to their final salary scheme. As an offshore worker though, this is unlikely to greatly affect you. By chance though, just two weeks ago we looked into the BP scheme for an active member, we applied for the usual information and a transfer value and were hugely pleasantly surprised to find the transfer values currently being offered are outstanding, so it's worth looking into now (while the trustees are crunching the numbers like this!)

BP pension scheme members will have recently received an email concerning the recent tax changes to pensions and how this has affected their scheme. Basically, there is a limit to the amount of tax-relievable contributions you are able to make to a pension each year known as the 'annual allowance'. This annual allowance is currently £40,000, but those earning over £150,000 pa are limited further. As an international worker though, it's unlikely you're making significant pension contributions, if any, and while you may be receiving employer contributions, except for the very senior staff and very high earners, we don't think you'll be affected.

The 'pension input period' is the year the 'annual allowance' is tested, and isn't necessarily linked to a calendar year, instead often simply to the date the scheme was either started or joined. BP are changing their pension input period to link to the tax year, they will be careful not to allow members to suffer any adverse affects, but if you do believe you are contributing significant amounts each year, its worth looking into to ensure you don't suffer unnecessary taxes.

The other point mentioned is of course the reduction in the lifetime allowance. Those with pensions accrued to date of £35k pa plus MUST review their options and ensure their pensions savings are protected from this as it comes with huge taxation penalties. If you're unsure of anything, get in touch. We're always available for a quick chat.

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