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Following the recent Spring Budget, a few changes have come into force from April 2023 that could affect your pension savings.

The amount that can be saved tax efficiently into a pension throughout a working lifetime has previously been capped at £1,073,000, this was known as the Lifetime Allowance.  Any monies saved into a pension above this figure was subject to a tax charge of up to 55%.  Following the Chancellor’s announcements in the Spring Budget, the Lifetime Allowance charge will be removed from April 2023, and the Lifetime Allowance will be scrapped completely from April 2024.  The maximum Pension Commencement Lump Sum however, for those without protections, will be retained at its current level of £268,275 and will be frozen thereafter.

Further changes were announced to the pensions annual allowance, with the contribution limit increased from £40,000 to £60,000.  For those already taking or having previously taken retirement income benefits, the Money Purchase Allowance will increase from £4,000.00 to £10,000.00.

As always, David Allen Financial Services are here to help guide you through any changes to your pensions and investments.  If you have any questions on how these changes may affect you, contact our team on 01228 711881.

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