Managing Partner Rosalind Connor spoke at the Pension Playpen Coffee Morning, on Tuesday 18 April 2023.

Rosalind discussed the changes to the lifetime allowance, which Chancellor Jeremy Hunt abolished in a shock announcement last month, and Labour’s suggestions that it would be reversed going forward.

“I don’t see it likely that Labour will say ‘oh let’s just act as if nothing happened on April 6 2023’ because apart from the fact that just annoys everybody, this is the opportunity to review a system that’s been in place for the better part of 20 years, which we all know doesn’t work perfectly, is fiddly in certain places and has unintended consequences.”

She also discussed the annual allowance which is still in place, quoting the Chancellor saying that the LTA was removed in order to help people, in particular doctors, who might be tempted to give up work because of the charges on their pension. 

“There was a lot of noise a few years ago about doctors saying ‘I don’t particularly want to go back to work when I’m coming to retirement, because if I just do a little bit of work, I am suddenly hit with all these pension tax charges’. The annual allowance charge is one people really don’t like because it’s when you’re being charged tax on money you don’t have. LTA charge is on money you have in the sense that you are paid some money and actually you have to give some of that back or some of that is retained to pay the tax.”

Read about Rosalind’s discussion in FT Adviser and Pensions Expert, here and here.