How is the Growth Calculated?

The following example shows how the ‘growth’ in each part of the pension is then used to calculate that element of the Annual Allowance.

Pension SectionAccrued Service at StartPensionable Salary At StartPension at StartTPVCPIRe-valued TPVAccrued Service At EndPensionable Salary At EndPension at EndEnd TPVPension Input Amount
199520y 60d£30,764£7,753£147,3072.7%£151,28421y 60d£32,086£8,486£161,248£9,964
200820y 60d£30,764£10,337£165,3922.7%£169,85821y 60d£32,086£11,316£181,056£11,198

TPV = Total Pension value.  This figure is calculated at the start.  Then inflation is added to give a re-valued TPV, which is then compared to the End TPV to calculate the Pension Input Amount
CPI = Consumer Price Index; the measure used to show the rate of inflation

We understand that this is a complex calculation and we have tried to make our example as straight forward as possible.

The important point to note is that IF you have received an Annual Allowance Statement saying you have breached this, contact us, or book yourself onto a Surgery and we will be able to explain your situation in full.