Budget 15th March2023, any pension changes predictions or views?

n3ophyte

dunstonh said:

I also noticed MPAA is increasing to £10,000 from April 23.

So … what do we call our £2880 Club now? The £7200 Club?

Malthusian

Gerbert said:

And presumably for those with say Fixed Protection 2016 (which fixed the LTA at 1.25M) it would be 25% of this latter amount, viz 312.5K?  Does anyone know differently?

Yes, it will be £312,500. I haven't seen confirmation of this but if I'm wrong I'll eat my hat. That's what the "without protections" caveat refers to. It would be retrospective taxation otherwise (the thing that the various protection regimes were designed to avoid).

zagfles

n3ophyte said:

dunstonh said:

I also noticed MPAA is increasing to £10,000 from April 23.

So … what do we call our £2880 Club now?

Makes no difference, they didn't say the tax relief limit is being increased

Simavon

One bit of detail. As well as increasing the AA to £60,000 the taper has been adjusted. The starting point has been increased to £260,000 and the minimum tapered allowance has increased to £10,000.

drjohn67

Late birthday gift - thank you! 

I had anticipated paying a £30000 charge on what is now (again) a TFLS that is waiting to be drawn and £50000 charge on the remaining pension pots waiting to be drawn. 

I will have had tax breaks of 25-40% on these contributions and will pay tax at 34-35% when claiming these amounts, that would have been in excess of the LTA, so it feels fair to be repaying the original tax breaks.

Not sure what the next government (?Labour) will do with LTA and pensions so I will be cashing all in this year. 

Cus

So the cut off must be £360k a year to get to £10k minimum, up from £312k to get the previous £4k (assuming it's still using the £1 for every £2 earned rule)

With the removal of LTA and the increase in tapering, now more worthwhile maxing the employer contribution if they offer it.

RogerPensionGuy

Without reading the details yet, I think I can see a sweet spot from today.

A couple with a few children and this couple earn about 100K PA each, they both park any pay above 50K in to a pension hopefully via salary sacrifice and are hopefully packing 60/120K in to their pension pots each year.

Maybe a friend or family are looking after the children and getting these coins to boot.

I see one issue I think, some people will be worried the LTA will be reinvented and the AA wound down again so maybe these people will over stuff their pension pots in these next few years and no spend too much in the economy.

Winners and losers I guess.

For me personally I am over the moon the silly 1.073M has gone and will contribute at my maximum possible pension input until I stop paid employment and as I was over the current LTA I will probably do as government wants and work a bit longer than I was thinking these last few months, then maybe reduce hours running down in stead of just leaving the workforce. I can now let my DB and DC pensions put on weight and augment my future financial planning in a more sensible and relaxed way. 

I feel very sorry for the people who activated pension stuff not really wanting to or paying/curtailing pension potential benefits. 

Albermarle

n3ophyte said:

dunstonh said:

I also noticed MPAA is increasing to £10,000 from April 23.

So … what do we call our £2880 Club now? The £7200 Club?

You are getting mixed up between two issues.
The MPAA ( now increased to £10K) is a maximum that can be added to a pension pa, if you have taken any taxable income from a DC pension.

£3600 gross ( £2880 net) is the maximum a non earner can add to a pension and that has not changes.

artyboy

Will be interesting to see how long the intention is to freeze the PCLS - if it's just a few years then no biggie, but could it be a sneaky way to eliminate it over the long term through inflation? 

Certainly if I were a 20-something being encouraged to join a pension scheme, it would be a bit of a disincentive to think that my PCLS in 40 years would barely buy me a cup of tea!

On the flip side, it's just more incentive for me to get the max out as soon as it's accessible..

Albermarle

Pat38493 said:

JoeCrystal said:

 The maximum Pension Commencement Lump Sum for those without protections will be retained at its current level of £268,275 and will be frozen thereafter.

Does mean the tax free cash part of DC is also being frozen / capped at a fixed amount rather than 25%?  So the value of the tax free cash part will slowly fall in real terms?

To be pedantic, it will still be 25% for the large majority of people, but it is now officially capped at £268,275, which has been the case for a couple of years anyway.
I wish they had rounded this figure up to something easier to remember !

Also this figure has already been frozen for a couple of years and will now be frozen for an indeterminate number of years apparently, although we will have to wait for legislation to see the final outcome. Over a period of years the value of the tax free cash will decline in real terms for those with big enough pensions to hit the cap, which will be an increasing number.