- Chancellor Jeremy Hunt has abolished the £1.073mn lifetime allowance (LTA) which capped the amount workers could benefit from in tax advantages on their pension pot. From April 6, the tax-advantaged pots will be unlimited.
- He also raised from £40,000 to £60,000 the annual allowance limiting how much savers could add to their pot in any year.
- Hunt’s stated intention is to dissuade older, better-paid workers from retiring, especially senior staff in the hard-pressed NHS.
- However, his critics, led by Labour, accuse him of revising the pensions system to benefit the rich, not least in minimising inheritance taxes.
- For most pension savers earning lower and middle incomes, the scrapping of the lifetime allowance won’t make any difference.
Tax-free pension changes: what they mean for you
Chancellor Jeremy Hunt’s sweeping boost to UK pension tax breaks looks set to benefit many higher earners, including doctors, lawyers and bankers. Labour has already pledged to scrap Hunt’s changes.