Budget statement March 2013
The Chancellor of the Exchequer George Osborne made his budget statement today. The changes which affect pensions are as follows:
- The start of the single tier state pension has been brought forward a year. This will now begin in the 2016/17 tax year.
- As a result, if you are a member of a defined benefit scheme, you will not be able to contract out of the state second pension from 2016/17. This means that you and your employer will no longer be entitled to pay national insurance contributions at a reduced rate.
- As announced in the Autumn Statement 2012, the lifetime allowance for pension savings will reduce from £1.5 million to £1.25 million from 2014-15. As part of this change, the Government will offer a fixed protection regime to help you to protect the savings you already have.
- The Government will also consult on the detail of an individual protection regime in Spring 2013. Legislation will be included in the Finance Bill 2014.
- As announced in the Autumn Statement 2012, the annual allowance for pension savings will reduce from £50,000 to £40,000 from 2014-15.
- The Government will increase the capped drawdown limit from 100% to 120% of the value of an equivalent annuity from 26 March 2013.
We will add further details to our website when they become available.
Click here for further information about the budget statement.
Click here to read more about the reduction in the lifetime allowanace and the annual allowance.