Lump Sum Payments: Tax Allowances
The question
To ask the Chancellor of the Exchequer, whether she plans to change the proportion of pensioners' tax-free lump sums that are exempt from tax.
Answered by Torsten Bell
The Government wishes to encourage pension saving to help ensure that people have funds to draw on throughout retirement. Up to 25 per cent of an individual’s pension can be taken-tax free, subject to a cap of £268,275 for most.
Although the Government keeps all tax rules under review, there are no current plans to make changes to the tax-free lump sum.
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