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People Management pensions article

ended 16. March 2023

Leading HR title, People Management magazine, is looking for views from IFAs and/or tax experts on the pension changes announced in yesterday's Budget. Besides reducing the temptation for people to retire early by improving the pensions tax regime, they're keen to know how else the changes could impact workers, e.g. will this also have an impact on group life assurance schemes and/or the employer-sponsored death benefits provided to employees? Is there anything else that has passed under the radar in terms of the impact on company benefits and insurance policies?



 

3 responses from the Newspage community

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Sam Alsop-Hall
Chief Strategy Officer at Clive Henry Group
It’s a smart move. Many senior people wind down just as their experience could make a massive difference. Capping pensions was always going to backfire, so this is strategically solid.
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David Robinson
Co-Founder at Wildcat Law
With the scrapping of the lifetime allowance, small self-administered schemes are looking even more attractive for small business owners. They already offer the ability to lend money to the business but with the removal of the lifetime allowance, they offer another IHT-efficient mechanism for business owners. Previously, the lifetime allowance had limited their efficiency for this but with the removal of the cap, expect to see a resurgence in SSAS uptake. The other area that we expect to see growth in is salary exchange for execs where pay is exchanged for pension contributions. The benefits of this are immediate savings on income tax combined with a potential saving on IHT.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
The changes announced are really positive for workers. One great piece of news is the increase in the Money Purchase Annual Allowance (MPAA) from £4,000 to £10,000. The MPAA meant that if you had taken one penny of income from your pension, you or your employer could not contribute more than £4,000 per year. Plenty of workers over 55 have taken income from their pension and continued to work so were caught out by this. With the increase to £10,000, older workers can continue to fund their pensions to boost their pot for when they get to retirement.