This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.

Search our site


| 1 minute read

Good news for pensions savers - but for how long?

Chancellor Jeremy Hunt announced in yesterday's Budget that he would increase the pensions annual allowance from £40,000 to £60,000 and abolish the lifetime allowance altogether. This will have come as welcome news not only to senior doctors looking to return to work without incurring penal rates of tax on their pensions but also to wealthier individuals generally who will now have the ability to save unlimited amounts into their pensions and, if written in trust, pass them free of inheritance tax on death.

Although a very attractive proposition to those in a position to add significant extra funds to their pension pots, there is a question around whether there is enough political certainty for people to want to take advantage of it. As Labour has immediately announced that it will reverse the abolition of the lifetime allowance if it wins power at the next general election, the result of that election is likely to dictate the future of the Chancellor's measures. It is unclear whether, if Labour enters power and reinstates the lifetime allowance, there would be any protection for those who have increased their pension pots in the meantime or whether such savers would simply suffer penal rates of tax as soon as there was a change of government. It remains to be seen whether or not people choose to take that risk. 

Labour has pledged to reverse plans to abolish the lifetime pensions allowance if it wins power