How might the big freeze affect you?
Traditionally, most people get nowhere near breaching the pensions lifetime allowance, but that’s likely to change over the next five years. In the 2021 Spring Budget however, Chancellor Rishi Sunak revealed that the lifetime pensions allowance would be frozen at £1,073,100 until 5 April 2026. This will be bad news for some. If you already have a sizable sum saved in your pension pot, the freeze means that you have an increased risk of exceeding the lifetime allowance and potentially facing a tax charge at some point in the future.
In this Active Practice Update we consider:
- What is the lifetime allowance?
- Who will it affect?
- The importance of monitoring your pension pots
- Tax charges
- Changing behaviours
- Testing the lifetime allowance
If you would like to discuss in more detail any of the issues raised with a member of our team, please call 01772 741200