The Autumn Budget, expected on October 30th, is the subject of much speculation, particularly regarding potential tax changes.
Reintroduction of Lifetime Allowance (LTA). LTA was abolished in April 2024, but prior to that point, savers became liable for an additional tax charge once their pension pot exceeded £1,073,100. There has been speculation that LTA could be reintroduced in the budget. Members can read this short recent article from Money Week.
Reduction of Lump Sum Allowance (LSA). LSA is the amount of tax-free money that can be taken from a pension pot and is currently £268,275. The CE has covered our intervention last year on the impact of reducing this amount following an Institute of Fiscal Studies report, and we will continue to monitor speculation over the coming months, and act accordingly.
Abolition or reduction of Salary Sacrifice for pension savings. Salary sacrifice is an arrangement between an employee and employer where the employee agrees to give up part of their gross salary in exchange for pension contributions. The sacrificed portion of salary is not subject to Income Tax or National Insurance contributions, which can lead to tax savings for both the employee and the employer. There has been speculation that changes to this scheme will be made in the Budget. Members can read this article from the Pensions Expert website.
