The big news from the '23 spring budget was the removal of the Lifetime Allowance
Please be aware the below blog is older than 12 months, therefore the information may not be relevant or up to date.
Before you get too excited, what Mr Hunt didn't say is that the tax free cash limit is staying fixed to a maximum £268,275. So whilst there is no 25% penalty tax, there will not be unlimited tax free cash. And tax free cash is a key advantage of pensions over other forms of investment.
The best piece of news is the increase of the annual contribution allowance to £60,000 pa and the annual allowance taper now beginning at £260,000 of earnings, gradually reducing your ability to contribute to a pension to £10,000 by the time your earnings reach £360,000.
Also, if you've already accessed your pension for income - that is, you've taken more than just the tax free cash - then you can now contribute £10,000 pa. If you're still working and earn at least £10,000 pa, this is a significant improvement on the old £4,000 under the Money purchase annual allowance.
If you would like to discuss how these changes may affect your pension or if you have any other questions regarding how to get the best from you pension please do not hesitate to contact me.
By Daren Wallbank
Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 23/03/2023
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
