“For people with bigger pension pots, the proportion that they are able to take-tax free will become less valuable as inflation takes effect,” says Stefanie Tremain, tax partner at Blick Rothenberg accountancy firm. He said this was done to stop doctors and professionals leaving the workplace as well as simplifying our fiendishly complicated tax system.
It was thought the £1.07m limit would be hiked to £1.8m but Mr Hunt wrongfooted us and instead, decided to axe it completely. The biggest surprise of the day was the scrapping of the lifetime pension allowance. Below, we explain what the detail of the main announcement means for your money. This is less than the 7 per cent fall predicted in November, but still the largest two-year fall since records compiled by the Office of National Statistics began in the 50s. Good news was delivered in the form of inflation, which is predicted to plunge to 2.7 per cent from the current 10.1 per cent, however the bad news is that living standards are expected to fall by 6 per cent. A raft of changes were announced on Wednesday by Chancellor Jeremy Hunt in the Budget, from the scrapping of the lifetime pension allowance to increased help with childcare when babies are just nine months old.
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