Budget 2021 – Pensions

The lifetime allowance increased in line with the Consumer Prices index to £1,073,100 for 2020-21.

The Chancellor announced in the Budget that this allowance will be frozen until 5 April 2026.

The annual allowance remains at £40,000.  This currently tapers to £10,000 for those earning over £150,000, reducing by £1 for every £2 that income exceeds £150,000.  The chancellor announced that the taper threshold would be increased by £90,000 such that tapering starts at £240,000, however, it will now taper to £4,000 rather than £10,000.

There is a reduced annual allowance for those who have started to draw from a pension. This remains at £4,000 for 2021-22.

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