Pensions: Tax Allowances
The question
To ask the Chancellor of the Exchequer, what her policy is on (a) the level of the pension annual allowance and (b) the application of a lifetime allowance to pensions.
Answered by James Murray
The Government wishes to encourage pension saving, to help ensure that people have an income, or funds on which they can draw, throughout retirement. There is no limit to the total amount you can build up in your lifetime pension savings without incurring a tax charge. Additionally, the £60,000 annual allowance ensures that saving into a pension is rewarding for everyone.
HMRC provided an update in its August newsletter that it will proceed with finalising changes to the abolition of the Lifetime Allowance for pensions and we have since laid the relevant legislation to do so. This came into force on 18 November and will have retrospective effect from 6 April 2024. There are no plans to reintroduce the lifetime allowance.
All taxes are kept under review as part of the Budget process.
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