Pension Simplification’ in 2006 brought with it a new and simple way of limiting tax relief on retirement savings through the Lifetime Allowance and Annual Allowance.
Over the last decade or so more and more employees have been caught by one or both of the allowances and many have been caught out with unexpected tax charges.
The Spring Budget earlier this year brought further changes, with a welcomed increase to the Annual Allowance from April 2023 and the abolition of the Lifetime Allowance in April 2024.
These changes should enable employees to save more into their pension and for those individuals who had opted out or reduced contributions to re-commence their savings.
Despite the fact that the pension tax allowances are an individual taxation concern, many organisations offer their impacted employees support to understand the implications and offer alternative cash arrangements. So what have employers done following the changes announced?
We consider what employers have done following the changes being announced and identify 3 key actions for employers as we head into 2024.