The July Budget and what it means for pensions

The chancellor made a number of announcements during his July Budget speech that may affect people paying into a pension scheme.

He confirmed that the lifetime allowance (LTA) will reduce from £1.25 million to £1 million from April 2016, although people who are affected by this change would be able to protect their benefits already built up. The chancellor also said that from 6 April 2018 the LTA will be linked to changes in the Consumer Prices Index. In addition, the Government is looking into the issue of pensions tax relief. Tax relief makes it cheaper for you to save into a pension. Most people can get tax relief on their pension contributions (usually up to £40,000 a year) but the Government wants to restrict tax relief for people who earn £150,000 or more a year.

There is more information on the GOV website here.

If you are affected by any of these changes, you should consider speaking to an independent financial adviser. You can find one on this website: www.unbiased.co.uk

The Government has also launched a consultation to find out if tax relief is the best way of encouraging people to save into a pension or if there is a better option. We will keep you updated on future developments through the website.