Reassess your retirement? Could it be time to review your pension contributions?

A recent study on the removal of the lifetime allowance (LTA) in?this year's Spring Budget, reveals it has had a significant impact on pension contributions and retirement plans. Chancellor Jeremy Hunt confirmed the abolishment of the LTA in March, allowing individuals to increase their pension savings without facing harsh tax penalties.

As a result of this change, over half of the respondents (51%) had either restarted their pension contributions, increased them, or were planning to do so. The number rose to 59%, amongst higher rate taxpayers.

Respondents who increased their pension payments are now contributing an average of ￡650 more per month. Additionally, about a quarter of respondents (23%) considered delaying their retirement plans to save more into their pensions.

Interestingly, a portion of respondents (10%) had come out of retirement due to the LTA removal, with another 6% planning to do the same.

Rob Gilbert LLB (Hons) , Adviser Manager at Clifton Wealth Partnership said “Whilst this change in policy to remove the LTA was welcomed and a lot of our clients have taken the opportunity to boost their savings in retirement, it still remains vitally important to speak to your financial adviser to ensure that you are maximising growth and efficiencies in all areas of your finances.” Rob continued by saying “There is no doubt that pension planning remains one of the most tax efficient ways to save for the future, especially with these recent changes. However, recent figures suggest that more and more estates are paying inheritance tax and so individuals should look to review all aspects of their finances with their adviser, including pension and estate planning.”

In conclusion, the removal of the LTA in the Spring Budget has certainly encouraged individuals to take action on their pension contributions, with many increasing their payments and considering adjustments to their retirement plans. However, it's important for individuals to carefully consider their pension strategies and seek professional advice to navigate the changes in tax treatment effectively.

Find out what Clifton Wealth Partnership could do for you: https://www.cliftonwealthpartnership.co.uk/