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Pension savers have been urged to check if they are affected by a key policy change.<\/p>\n
The pension lifetime allowance (LTA) was removed at the turn of the tax year earlier this month.<\/p>\n
Under the previous allowance, a person could save up to \u00a31,073,100 into their private pensions and not pay tax, with the policy to be scrapped from April 2024.<\/p>\n
The change means income and lump sums from pensions valued above the LTA will be subject to income tax at the beneficiary’s marginal rate.<\/p>\n
But Steven Cameron, pensions director at Aegon, warned that how the new policy will work is still being set out.<\/p>\n<\/div>\n
He told Express.co.uk: “There are extremely complex transitional arrangements and the tax authorities are still communicating the details.<\/p>\n
“So although the lifetime allowance has been abolished, the details of what\u2019s replaced that are not all finalised.<\/p>\n
“Anyone who is concerned about this really should seek advice. Hopefully, the abolition will work in their favour but there\u2019s lots of bear traps along the way.”<\/p>\n<\/div>\n
However, experts previously said the change could benefit all pension savers. Tom Selby, director of public policy at AJ Bell, said: “Savers in all types of pension scheme stand to benefit, with those accessing a defined contribution retirement pot only having to pay income tax on withdrawals.<\/p>\n
“The end of the lifetime allowance does not, unfortunately, mean the end of complexity, because two new lifetime limits will be introduced in its place.<\/p>\n
“These new allowances are designed to limit the pension tax-free lump sums people can receive in life and the tax-free lump sums they can pass onto beneficiaries when they die.”<\/p>\n<\/div>\n
Another key pension change coming in from this month is the increase to the state pension, with payments going up 8.5 percent.<\/p>\n
Under the new rates, the full basic state pension is now \u00a3169.50 a week while the full new state pension is \u00a3203.85 a week.<\/p>\n
A person can check how much state pension they are on track to receive using the Government’s state pension forecast tool.<\/p>\n
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.<\/b><\/p>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":"
[ad_1] Pension savers have been urged to check if they are affected by a key policy change. The pension lifetime allowance (LTA) was removed at the turn of the tax year earlier this month. Under the previous allowance, a person could save up to \u00a31,073,100 into their private pensions and not pay tax, with the …<\/p>\n","protected":false},"author":1,"featured_media":35567,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/35566"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=35566"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/35566\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/35567"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=35566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=35566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=35566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}