Annualised CPI to September 2017 was 3% therefore the pension Lifetime Allowance (LTA) will increase by 3% from April 2018.
LTA therefore due to rise from £1,000,000 to £1,030,000 from 6th April 2018
It is, of course, welcome that the LTA is scheduled to increase for the first time since April 2010 but it will still be significantly lower than previous LTA limits.
Assuming clients and advisers are targeting investment returns to beat inflation then, increasing annually by CPI, the LTA will not keep up with the expected growth of client pension funds. This even assuming that there is no future reduction in the LTA or the CPI increases are not suspended in the future.
Increasing numbers of clients will be affected by the Lifetime Allowance especially if the number of defined benefit pension transfers increases and transfer values of 30 times (or more) deferred benefits that we are seeing continue to be offered.