19 Mar Pensions 2021 budget announcement. What does this mean for me?
Chancellor, Rishi Sunak, announced in the 2021 Budget that the pension’s lifetime allowance (LTA) total amount you can save into private pensions without incurring a hefty tax charge, has been frozen at £1,073,100 and will be reviewed again in April 2026.
It’s expected this will affect medium to high earners who are building up a significant pension. According to recent findings, approximately 10,000 pension savers will exceed the threshold over this period and become liable for a tax of 25 per cent or 55 per cent (depending on how they access their pension).
If you are unsure how this will affect you, please call our team of advisors who are on hand to answer any questions.
Other news, the New State Pension will rise by 2.5 per cent in the 2021-22 tax year.
Thanks to the triple-lock guarantee the single-tier New State Pension is to rise by 2.5 per cent in 2021/22 up from £175.20 per week to £179.60 per week Those who reached State pension age before April 2016 receive the Basic State pension and they will see an increase up to £137.60 per week from 6 April 2021 from £134.25 per week currently.
Also note: ISA subscription limit remains at £20,000 in 2021/22 and the Junior ISA and Child Trust Fund subscription limits remain at £9,000.
Our team of advisors are on hand to speak with you, call us on 01606 338914.