On the 15th March 2023 the Chancellor Jeremy Hunt delivered the budget and there were some surprise announcements. We have included a number of these below in case you missed them.

How might some of the new proposals impact you?
These are general takeaways, if you have specific questions of how this might impact you, please contact your adviser through either normal means or the contact page


Pension Changes
Lifetime Allowance

1. The Lifetime Allowance of £1,073,100 will be abolished from the 6th April 2024. However no tax charges will be made for Pensions over the allowance from the 6th April 2023.
2. The maximum tax free lump sum, for those without protection, remains at £268,275. This is 25% of the previous Lifetime Allowance of £1,073,100, any withdrawals above this will be taxed at your marginal rate.
3. Currently pensions grow outside of your estate for Inheritance Tax purposes. The abolition of the Lifetime Allowance means there are no caps on the amount you can save in your pension, and outside of your estate.
4. Those that die before the age of 75 could pass their pension benefits to their beneficiaries tax free, previously this was limited to the Lifetime Allowance. The changes now make this unlimited.
5. Those that die after age 75 see their beneficiaries incurring income tax charges at their marginal rates.

If you have questions on how changes to the Lifetime Allowance may impact the Inheritance position on your estate please speak to your adviser.
Annual Allowance

1. The annual allowance has been increased from £40,000 to £60,000.
2. The income threshold before the tapered annual allowance is applied has been increased from £240,000 to £260,000.
3. The tapering now stops when your allowance has been reduced to £10,000, this is £6,000 higher than the previous amount of £4,000.

Again please speak to your adviser if you are thinking of making additional contributions or are unsure of how this impacts your tax position.
Money Purchase Annual Allowance (MPAA)

1. The MPAA has been increased from £4,000 to £10,000.

If you have taken taxable income from your pension you will have triggered the MPAA.

Childcare Proposals

1. The extension of 30 free hours childcare (38 weeks of the year) to parents with children aged 9 months to three years old. Available where no parent has an individual income of over £100,000.

The cost of childcare provisions has seen many parents reduce their hours or stopping work altogether and stay at home to look after their children. It has also seen an increase in the number of those in retirement looking after their grandchildren to help parents balance childcare responsibilities and career growth.
The changes proposed aim to alleviate these problems and encourage more parents to return to work once their maternity/paternity comes to an end, it could also see fewer grandparents being required to spend large parts of their retirement assisting with childcare, and more time available for cheese, wine, beers and holidays!
These changes will be implemented over an 18-month period. Further details can be found here
https://educationhub.blog.gov.uk/2023/03/16/budget-2023-everything-you-need-to-know-about-childcare-support/
 
Energy Support Extension

1. The energy support scheme has been extended for a further 3 months until the end of June.

The energy price cap was set to be increased to £3,000 in April, however with energy bills set to start to fall in July it was announced that the cap would remain in place for a further 3 months.