2023 Spring Budget 

Following the recent statement by the Chancellor in his Spring Budget (2023), we acknowledge the following proposed changes to come into effect from 6th April 2023:

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• The current Annual Allowance will increase from £40,000 to £60,000. Individuals will continue to be able to carry forward unused Annual Allowances from the previous three tax years (i.e. £40,000 per annum from 20/21, 21/22 & 22/23)

 

• The Money Purchase Annual Allowance will increase from £4,000 to £10,000.  The minimum Tapered Annual Allowance will increase from £4,000 to £10,000 from 6 April 2023.  The adjusted income threshold for the Tapered Annual Allowance will also increase from £240,000 to £260,000.

 

• The Lifetime Allowance (LTA) charge will be removed, with the LTA limit subsequently fully abolished from April 2024.  The maximum tax-free lump sum (known as Pension Commencement Lump Sum or PCLS) for those without LTA protections will be retained at its current level of £268,275 and will be frozen thereafter.

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Should you have any queries, we would be more than happy for you to contact us.  However, you will appreciate that these announcements are both significant and without our prior knowledge and it may not be possible for us to suitably or immediately assess all consequences that these changes may have to your pension strategy at this time.