![Pinterest](https://pinterest.com/pin/create/button/?url=https://uknews.evprotec.com/budget-could-hit-millions-of-pension-savers-with-tax-raid-on-pots/&media=https://uknews.evprotec.com/wp-content/uploads/2022/11/crop-20332268.jpg&description=MILLIONS of pension savers could have their pots raided thanks to a new stealth tax set to be unveiled in the November 17 Budget. And experts have said that the move on retirement nest eggs could put people off saving into a pension at all. The pension lifetime allowance was frozen last year in Rishi Sunak's Spring BudgetCredit: AFP According to The Daily Telegraph, Rishi Sunak and Jeremy Hunt have plans to extend the freeze on the pension lifetime allowance in their Budget later this month. The pension lifetime allowance is the total amount you can save tax-free in a pension scheme. Pensioners have to pay tax if their pension pots are worth more than the lifetime allowance. This is currently £1,073,100. Pension savings over £1,073,100 are taxed at 55% if the money is taken out as a lump sum or at 25% plus your income tax rate if taken out gradually. So for every £100,000 above the lifetime allowance will mean pensioners will have to fork out £55,000 in tax. The pension lifetime allowance had been expected to rise in line with inflation last year, but in his 2021 Spring Budget, Rishi Sunak froze it at its current level until 2025/26. But it now looks like that freeze will be extended by another two years until 2027/28. Steve Webb, the former pensions minister who is now a partner at LCP, told The Daily Telegraph: "When the lifetime allowance was firstcreated it was designed to stop the super-rich creaming off too much in pension tax relief over their lifetime. "But a series of cuts and freezes has meant that the LTA is now an issue for far more people. "If the current freeze is extended even further, we could easily see two million people in the workforce having to start to think about capping their pension savings in order to avoid tax charges. "Double digit inflation means that this policy has been much more brutal than first anticipated and extending the freeze for another two years would make the Lifetime Allowance a mainstream concern for literally millions of){kind=link}
MILLIONS of pension savers could have their pots raided thanks to a new stealth tax set to be unveiled in the November 17 Budget.
And experts have said that the move on retirement nest eggs could put people off saving into a pension at all.
According to The Daily Telegraph, Rishi Sunak and Jeremy Hunt have plans to extend the freeze on the pension lifetime allowance in their Budget later this month.
The pension lifetime allowance is the total amount you can save tax-free in a pension scheme.
Pensioners have to pay tax if their pension pots are worth more than the lifetime allowance. This is currently £1,073,100.