Traditionally, most people get nowhere near breaching the pensions lifetime allowance, but that’s likely to change over the next five years.

The lifetime pensions allowance is currently £1,073,100. In his Spring Budget, however, Chancellor Rishi Sunak revealed that this would be frozen until 5 April 2026 – along with a raft of other tax rates and thresholds. This will be bad news for some.

It stands to reason that this ‘stealth tax grab’ will affect more savers as time goes by, making it more important than ever to consider how best to utilise your pension tax allowances if you’re to save for your retirement in the most tax-efficient way.

The five-year freeze means, if you already have a sizable sum saved in your pension pot, you have an increased risk of exceeding the lifetime allowance and potentially facing a tax charge at some point in the future.

In our article this month, we take a look at what the lifetime allowance is, who it will affect and what you need to consider. Get in touch with us to discuss planning for your retirement.

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