Budget 2016 – Pensions

The lifetime allowance will be reduced to £1 million (previously £1.25 million) from 6 April 2016.  The allowance will be indexed by inflation from 2018.

The annual allowance remains at £40,000.

Previous changes to pensions
A reminder that, from April 2015, significant changes happened to introduce more flexibility into how money can be drawn from pension pots.
You can find an outline of the new rules here.

Employer provided pensions advice

Legislation will be introduced to introduce a new income tax exemption and a corresponding National Insurance disregard for financial advice on pensions for the first £500 of the cost of provision, where the advice is arranged by the employer. This will come into effect from 6 April 2017.

Pensions Advice Allowance

The government will consult on allowing people to withdraw £500 tax free, before the age of 55, from their defined contribution pension to redeem against the cost of financial advice

 

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