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How did the 2023 spring budget affect the lifetime allowance?

The spring budget announced massive changes to the lifetime allowance (LTA).

Traditionally, pension benefits in excess of the LTA could be subject to additional tax charges. It has been announced that these charges will be abolished.

Although these charges are being abolished, there will still be restrictions on the amount of tax-free cash anyone can take from their pension. Under current proposals, tax-free cash entitlement will be limited to the lower of 25% of the pension pot or £268,275.

As the changes will not start to come into place until 6th April 2023, anyone who is planning to retire prior to that date should definitely reconsider their options and take professional financial advice.

Farrell Financial Planning are independent financial advisers (IFAs) based in Glasgow. We offer independent financial advice on pensions, investments, income protection, mortgages and much more.

Contact us today and find out how our expert advice can help you plan for your retirement with confidence.

Information correct as at 15/03/23.

A pension is a long-term investment. The fund value can fluctuate and go down. All information is based on Farrell Financial Planning’s understanding of UK law & HMRC practice in the UK. Tax and legislation are subject to change.

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