HMRC also revealed that the number of savers whose pension pots were over the limit leaped to 1,539 between 2015/16 from the 1,482 figure reported during the previous 12 months.
The LTA, which caps the amount of money people are able to save tax-free into pension over their lifetime, has already been slashed twice in recent years, going from £1.8m in 2011 to £1m in April this year.
HMRC figures for 2015-16 show that 449 individuals were taxed 55% on the amount exceeding the £1.25m limit, while 1,009 were charged 25%.
Since 2011, the number of savers being hit with hefty tax bills has increased dramatically, with the HMRC raking in £83m in 2013-14, compared to just £47m in 2011-12.
LTA ‘too low’
Speaking to International Adviser, Grant Hughes, the head of UK-based advisory firm Mercer Jelf Financial Planning, described the LTA as “too low”, adding that in recent years it has raised the need for financial advice and careful tax planning.
“Investors are having to look outside of pensions in terms of what are the most appropriate ways for them, and I think the lifetime allowance level is probably too low.
“I think it’s demonstrated the need of advice and the value it can bring,” said Hughes, who was appointed head of the newly-created division in June.
