Spring 2023 Budget

In Wednesday's Budget the Chancellor announced a number of changes in respect of taxation on pension savings, these changes include:

•    Increasing the standard Annual Allowance from £40,000 a year to £60,000 a year from 6 April 2023

For the highest earners, the Annual Allowance is reduced, by £0.50 for each £1 by which adjusted income exceeds £260,000, subject to an increased minimum Annual Allowance of £10,000 a year

•    Increasing the Money Purchase Annual Allowance from £4,000 a year to £10,000 a year

•    Removing the Lifetime Allowance charge from 6 April 2023

•    Freezing the maximum amount a member can take as a pension commencement lump sum at £268,275 (25% of the current standard Lifetime Allowance). The government has indicated that individuals with a protected right to a higher pension commencement lump sum will continue to be able to access this right. 

While the Budget has provided the headline changes, the details of the workings of the changes will not be available until the Finance Bill 2023 and accompanying regulations are published later this year.  Once further details are available we will work with our legal advisor and systems provider to update our member guides and Pension Web Portal to reflect the changes in due course.

Further information can be found in our helpsheet

In the meantime, if you were intending to draw your Fund pension imminently but would have been subject to an LTA charge, you may wish to defer taking your Fund benefits until on or after 6 April 2023.