A few years ago and every time that the Chancellor opened their mouth there was something new happening in the world of pensions, but it has all been quiet of late, until now.
Jeremy Hunt has decreed that the Lifetime Allowance (LTA) is being scrapped, well mostly. From 6th April you can have as much as you like within your pensions. Until Labour reverse it when they come to power at the next election.
I say mostly, as you will still only be able to take 25% of the current LTA as tax free cash, not 25% of your fund value (they didn’t want to keep it simple, did they?!) So up to £268,275 is yours tax free.
On top of that, from 6th April you will be able to put in up to ÂŁ60,000 per tax year. If you earn over ÂŁ240,000 pa or if you have already started to draw your pension you will be able to put ÂŁ10,000 into your pension per tax year, up from ÂŁ4,000 – you don’t have the bigger allowance.
Nice increases. Let’s see if they stay.
