..." chancellor Jeremy Hunt abolished the lifetime allowance on pension pots altogether.
As part of ... Spring Budget, (Chancellor) said the Lifetime Allowance charge will be removed from April 2023, before the allowance is abolished entirely from April 2024."...
..."the Lifetime Allowance charge is expensive and doesn't bring in a great deal.”
Rosalind Connor, managing partner at ARC Pensions Law ... explained that if you look at the Lifetime Allowance structure as a whole, it is quite complex.
* “It's a lot of effort for (pension companies) but it's also quite a lot of effort for HMRC (taxman who've) got all these notifications coming in and then keeping an eye on all this stuff and having to check this number against that number the whole time."...
..."It's very time consuming and therefore expensive for HMRC to run."...
..."Rachel Reeves has said Labour will oppose the Lifetime Allowance changes"...when get into government at next general election.
From British Medical Association ..."The BMA had been calling for the annual allowance to be scrapped in public sector defined benefit schemes, a solution supported by the governments own advisors, the Office for Tax Simplification."...
..."The
annual allowance is a threshold which restricts the amount of pension savings you are allowed each year before tax charges apply.
From Finance Times Adviser article:
..."the problem with the annual allowance.
“I understand it happened, particularly to doctors who had long service,” (Connor) said. “If (doctors) did work in a (Defined Benefit works pension) scheme, the way that the accrual works meant that they would be subject to an annual allowance charge on the accrual ... ( which is the rate at which you build up works pension benefits, while a member of a Defined Benefit (works pension) scheme).
The accrual means they're not getting the money and you are getting people whose net income after tax, from the work they were doing, was entirely being swallowed by then having to pay the annual allowance charge.
“So effectively, they're saying 'why would I work because the effect of it is that my pension goes up, but I haven't got my pension'. The effect of it is I have to pay the government money to work or not get a salary.”...
Connor said that is obviously an issue for people but it is to do with the annual allowance.
“As I understand it, that was the biggest complaint,” she added. “I'm not saying people wouldn't like to not have an Lifetime Allowance, but in that particular problem, the annual allowance was the issue.”...
..."Connor explained that if an individual is subject to an income tax charge of 70 per cent, they may be unhappy, but it essentially means they just get a smaller income.
It doesn't mean that someone is charging money for a thing they haven't got and that’s the problem with the annual allowance."...