Martin Lewis points out pension change which Hunt ‘didn’t say’ in speech | Personal Finance | Finance
Steven Cameron, pensions director at Aegon commented on the increase of the MPAA explaining that the Chancellor’s bumper pack of pension tax relaxations will come as a welcome boost to many individuals.
Scrapping the Lifetime Allowance coupled with increasing the Annual Allowance by 50 percent to £60,000 will be particularly beneficial to higher earners.
He said: “But while not mentioned in his Speech, the change which will benefit the greatest number of individuals is the increase in the little known Money Purchase Annual Allowance which will support a greater number of over 55s staying in or returning to the workplace.
“The Money Purchase Annual Allowance is increasing from £4,000 to £10,000. Many individuals over 55 who have taken income ‘flexibly’ from their money purchase pension may not have realised that by doing so, they reduce the maximum they can then save in a pension.
“They may have done so because they lost their job or needed extra funds to tide them over during the pandemic or the current cost of living crisis.