Finance expert Martin Lewis has highlighted a “significant” change to pensions that the prime minister did not mention in the spring budget.
Prime Minister Jeremy Hunt on Wednesday announced changes to pensions in the budget, including the abolition of lifetime benefits.
But there was one change the prime minister didn’t mention in his address to parliament. This is also intended to encourage older people to keep working, Lewis said.
Financial experts have pointed out that people in certain situations can put more money into their pensions.
The government will increase the annual allowance from £40,000 to £60,000 from 6 April 2023, according to the budget document. This is the maximum amount that you can save for your pension in the tax year (April 6 to he April 5).
From 6 April, the Money Purchase Annual Allowance (MPAA) will also increase from £4,000 to £10,000, which replaces the annual post-retirement allowance. 2023.
Mr Lewis said: Now what that means is the amount that people who already have some pension are allowed to put into their pension.
“So now my annual allowance is £40,000, which is £4,000. So when I take some money from my pension, suddenly I can only put in £4,000. But in the future, my annual allowance is £60,000. .
“Even if you take any money from your pension, you can put aside £10,000 a year, which is more than enough for most people.”
Lewis also pointed out his thoughts on why the prime minister changed the allowance. He added: “And of course, he believes that the change to pensions will help people who are thinking not to work, people in their 50s and older who are thinking not to work, and actually He says it’s all about encouraging people to work hard.
“And I think the purchase allowance for that money is going to be big.”
Among the measures announced in the budget included a significant expansion of state-funded childcare aimed at boosting economic growth. Hunt also said he would add £11 billion to the UK defense budget over the next five years.
The UK’s Office for Budget Responsibility (OBR) now predicts the UK will not enter a technological recession this year, and the government will “keep up with the prime minister’s priorities of halving inflation, reducing debt and growing the economy.” satisfy,” he said.
Despite “continued global volatility”, the OBR expects UK inflation to ease to 2.9% by the end of 2023 from 10.7% in the fourth quarter of last year, Hunt said. said.