Pension changes coming in 2023 – from payment rises to tax cuts
A number of changes are coming to UK pensions in 2023, including changes announced by Chancellor Jeremy Hunt in today’s Spring Budget.
From pay increases to tax cuts, these changes could help pensioners to save some cash, as the cost of living crisis continues to bite.
It was predicted that the Chancellor could announce that the state pension age would increase to 68 sooner than planned, but for now it seems that things are staying as they are.
Wondering how this affects you? Here’s a list of all of the changes to pensions coming in 2023.
Increase to the annual pension allowance
As part of the Spring Budget, The Treasury has announced that the annual Pension allowance will be increased.
This is the most amount of money you can save in your tax pot each year before having to pay tax.
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- Pension changes coming in 2023 – from payment rises to tax cuts
To get the latest from the budget announcement visit Metro.co.uk's Metro's Budget news hub.
The current allowance is £40,000 but this will increase to £60,000 from April 6.
Abolition of pension lifetime allowance
The lifetime pensions allowance is the maximum amount you can draw from your pension (workplace or personal) in your lifetime without paying tax.
This currently stands at £1,073,100, however, Mr Hunt announced today that it will be completely abolished from April, 6, 2023.
Announcing the change, the Chancellor said: ‘Some have asked me to increase the lifetime allowance from its £1 million.
‘But I’m not going to do that. Instead, I will go further and abolish the lifetime allowance.
‘This will incentivize our most experiences workers to stay in work for longer’.
A rise in state pension payments
After the government reinstated the triple lock, state pensions are rising by 10.1% from next month.
The triple lock guarantees the state pension goes up by the highest out of average earnings, Consumer Price Index (CPI) inflation, and 2.5%.
This means that from April 10, the basic state pension will increase from £141.85 to £156.20 per week.
The full new state pension will rise from £185.15 to £203.85 per week.
Deadline to boost National Insurance contributions delayed
The deadline to boost National Insurance contributions has been pushed back.
At present, most people need at least 10 years to claim any part of their pension, and 35 years on their National Insurance record to claim a full new state pension
You can buy National Insurance contributions dating all the way back to 2006 to boost your retirement pot and full any gaps in your employment record.
However, after July 31, you can only top up your National Insurance contributions from the six previous tax years.
The deadline was originally April 5, but this has been extended.
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