Pension annual allowance is changing to £60,000 but what happens if you go above the limit | Personal Finance | Finance

Chancellor Jeremy Hunt has also scrapped the pensions lifetime allowance, which is currently £1,073,100.

Ministers have brought in the new policies in efforts to encourage Britons back into work as they can save more of their income into pensions and avoid paying tax.

Stuart Lee, chief executive of Rest Less, warned the changes could have little effect. He said: “Trying to encourage large numbers of economically inactive over 50s back to the workplace with tax incentives for those with more than £1million in their pension, or who are saving more than £40,000 a year in their pension is like rearranging the deck chairs on the sinking Titanic – it’s absolutely pointless.

“For the majority of people, the reason they left the workplace is not due to a lack of tax incentives on their pension, but rather a lack of access to relevant and flexible work which can fit around the sometimes complex and myriad other responsibilities faced by this demographic.

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