General election delays cut to pension annual allowance

People who have already withdrawn some of their pension savings can currently contribute a maximum of £10,000. This was due to be cut to £4,000 in April as part of the government’s Finance Bill, but this has been delayed, The Telegraph has reported.

When Prime Minister Theresa May announced a general election was to take place in June, the Finance Bill was in the process of going through parliament, but it has now been stalled.

People over the age of 55 can assess some or all of their pension savings. If they do so, they can currently only contribute what is known as an annual allowance of £10,000 year tax free to their savings. Any amount contributed above the annual allowance is taxed.

Though the maximum yearly allowance was intended to be cut to £4,000 in April, in theory people can still put in £10,000.

Some pension experts fear that the government will backdate the law when it comes into force after the general election and penalise people who have exceeded the new £4,000 limit. These include former Pensions Minister Steve Webb, who has said it would be “most unfair” if the law affected contributions that had already been made. He said:

“The cut in the annual allowance is a bad idea in the first place, but imposing it with retrospective effect would add insult to injury.”

People in the Wirral area concerned about pension benefits should talk to Endeavour about retirement planning. With our assistance, they can enjoy a financially comfortable retirement.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation

Posted by Alan
20th May 2017

Disclaimer

All blogs and news on Endeavour Financial Planning are for information purposes only and are not intended to provide advice. Please seek the advice of a financial advisor before making any financial decisions.

Pensions

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