The pension lifetime allowance (LTA) charge, which puts a limit on the amount people can save tax-free over their entire life, will be scrapped, taking thousands out of the complexity of pension tax. Meanwhile, the total amount Britons will be able to accumulate in their pension savings each year before paying extra tax has risen.
The amount people can save each year will increase from £40,000 to £60,000.
For years, the lifetime threshold has been frozen at £1,073,100, however, Mr Hunt today confirmed it will be abolished.
The policy aims to stop people from reducing their hours or retiring early in order to avoid a hefty tax bill. The problem has particularly presented itself when it comes to doctors, many of whom are leaving the profession for this reason.
Steven Cameron, Pensions Director at Aegon said the Chancellor had “pulled a massive rabbit from his Budget hat” by scrapping the Lifetime Allowance, rather than increasing it to …