In the 2023 Spring Budget statement, there were some significant changes announced in terms of pensions, so in this short video, CBW Tax Partner, Michaela Lamb, focuses on three key pension updates, and what impact these changes will have.

• What does the abolition of the Lifetime Allowance actually mean in practice?
• What do the changes to the annual allowance and tapering rules mean?
• How does pension tapering work, and what impact will the changes have?

Watch our video to hear the answers to these questions, and please do get in touch with Michaela if you would like to discuss in more detail.

Abolition of the lifetime allowance

The Lifetime Allowance (currently at £1,073,100) is to be abolished from April 2023, so that more people can continue to make contributions without fear of an additional tax liability, as the Chancellor attempts to stem the wave of early retirements. This will be welcomed by the very highest earners.

Increase of the Annual Allowance

The pension contribution Annual Allowance is being increased from £40,000 to £60,000 from 6 April 2023, meaning that the maximum amount that most people will be able to contribute tax free will be £60,000.

Tapering changes

The tapered allowance for the highest earners will increase from £4,000 to £10,000, with the income threshold also being increased from £240,000 to £260,000, reducing the pain of a tax clawback felt by those wanting to make pension contributions, or who have had contributions made on their behalf.

What next?

If you have any questions on the pension changes announced in the 2023 Spring Budget, please contact CBW Tax Partner Michaela Lamb, or Chris Clayton, Partner & Managing Director of CBW Financial Planning.