Treasury considers extending freeze on lifetime allowance to 2028
A further raid on pension savings will mean two million savers now face tax charges of up to 55pc on their retirement funds, analysis suggests.
The pension lifetime allowance is a cap on the amount of money you can save for your retirement without having to pay tax.
The threshold is currently frozen at little more than £1m until 2026 – meaning more and more workers will be hit by the charge as inflation drags their savings over the limit. Now, a further two-year freeze is understood to be under consideration by the Treasury.
Analysis from consultancy LCP suggests that before the first freeze around 1.2m savers were at risk of breaching the allowance. The five-year freeze put around 500,000 more at risk, and a further two-year freeze would bring the total at risk to two million, LCP estimates.