Pension savers caught by lifetime allowance rule change

"Conversely, you might be considering moving your DB benefits to a DC environment to be able to reshape how you draw your funds: chances are, you will trigger more lifetime allowance charge (at 25 per cent on some of the fund) - but the move might still suit your needs."

Scott Gallacher, adviser at Leicester-based Rowley Turton warned of letting the tax tail wag the investment dog.

"As the LTA can be paid as a 25 per cent additional tax on 'income' for many,  the effective rate falls to 40 per cent in retirement.

"For example, £100 of excess pension fund less £25 LTA equals £75 of 'income', so £75 less 20 per cent basic rate of income tax equals £60. Consequently, for  higher rate taxpayers pensions still make sense if they exceed the LTA due to tax free growth and possible  national insurance savings on salary sacrifice/employer contributions."