Pension tax relief fears

After making pensions easier to use and giving greater flexibility over how benefits are drawn, policy has shifted towards limiting how benefits can be accrued. The standard lifetime allowance has been gradually reduced over recent years. It was £1.8 million in March 2012. It’s now £1 million. Benefits in excess of this cap, when drawn, suffer additional tax charges. Equally the annual allowance limits the amount of tax relief on pension contributions to £40,000 per annum. But with the cost of retirement income saving incentives at £38bn most believe tax breaks on pensions contributions remain on Chancellor Hammond’s radar and commentators are fearful that further cuts are possible after Brexit. If you would like to discuss this article further, please contact us.