Sarah Bradford explains the changes to the pension tax rules from 6 April 2023.
In a surprise move, the Chancellor announced a number of changes to the pension tax rules in his Spring 2023 Budget. The changes include the abolition of lifetime allowance charges, the forthcoming abolition of the lifetime allowance, and an increase in the pension annual allowance and money purchase annual allowance.
This article highlights what the changes mean for those looking to save for retirement in a tax-efficient manner.
End of the lifetime allowance and associated charges
The lifetime allowance placed a cap on total tax-relieved pension savings. Prior to 6 April 2023, if a person’s pension pot exceeded the lifetime allowance (set at £1,073,100 at the point when the pot is first accessed), a lifetime allowance charge applied to the excess. The amount of the
