Author
Eleanor Dennis
Published
21st April 2023
The recent Spring budget announces major changes to the pension taxation system for 2023/24 and beyond. The key changes are the abolishing of the lifetime allowance charge and the increase to the annual allowance. Members who exceed the lifetime allowance in 2023/24 and opt to take a pension lump sum over the £268,275 limit will now be charged at their marginal tax rate rather than the previous 55%. In 2024/25 the lifetime allowance will be abolished. Members are limited to a maximum tax free cash of £268,275 unless they have previously applied for protection. The annual allowance threshold has risen from £40,000 to £60,000 for all active members with affect from 2023/24 tax year. Further information can be found at the HMRC website in the links below or by contacting the pensions team at pensions@lbhf.gov.uk https://www.gov.uk/government/publications/lifetime-allowance-guidance-newsletter-march-2023/lifetime-allowance-guidance-newsletter-march-2023#pension-commencement-lump-sum-and-lifetime-allowance-protections https://www.gov.uk/tax-on-your-private-pension/annual-allowance
The annual allowance threshold has also changed and has risen from £40,000 to £60,000 in 2023/2024.
Further information can be found at the HMRC website or by contacting the pensions team at pensions@lbhf.gov.uk
https://www.gov.uk/government/publications/lifetime-allowance-guidance-newsletter-march-2023/lifetime-allowance-guidance-newsletter-march-2023#pension-commencement-lump-sum-and-lifetime-allowance-protections
https://www.gov.uk/tax-on-your-private-pension/annual-allowance
