News

Pensions were top of the list in the recent Budget announcement detailing significant changes to pension tax allowances coming into effect on 6 April 2023.

What’s changing?

The chancellor has increased the limit to what you can build up in your pension each year by 50%. This change should reduce or eliminate tax charges that high earners may face in a high accrual scheme.

It was also announced that the Lifetime Allowance (LTA) which is the limit to how much you can save in your lifetime will be abolished from April 2024 and LTA charges are being removed from 6 April 2023.

In summary:

• Lifetime Allowance (LTA) tax charge will be removed from 6 April 2023, before being completely abolished from April 2024.
• Standard Annual Allowance (AA) tax free pension savings will increase from £40,000 to £60,000 from 6 April 2023.
• Tapered AA will now commence for individuals with adjusted income in excess of £260,000 (previously it was from £240,000).
• The minimum tapered AA will increase from £4,000 to £10,000. i.e. based on the current working of the taper, it will taper down from £60,000 to £10,000 for adjusted income between £260,000 and £360,000.
• Money Purchase Annual Allowance (MPAA) will increase from £4,000 to £10,000.

We’ll update our website’s News section as soon as we know more about any further changes to EAPF.