Pensions – yet more change

Also in the Autumn Statement came a further raft of pension changes. The reduction in the annual contribution limit from £50,000 to £40,000 from 2014/15 was unwelcome, but not as unwelcome as the larger reduction which had been predicted. So perhaps that was good news?

This reduction will need to be taken into account when deciding how much to contribute during 2013/14 to any money purchase pension scheme for which the pension input period ends in 2014/15.

For those pensioners who have chosen to draw their pension via Income drawdown, there was a welcome u-turn. The maximum drawdown limit is to be increased from 100% back to 120% of the value of an equivalent annuity. A little bit of good news for people whose pensions have been reduced by falling gilt rates.

In addition, also from 2014/15, the lifetime allowance will be reduced from £1.5m to £1.25m and there will be the usual opportunity to elect for fixed protection for those with pension pots in excess of £1.25m.

If you are concerned about your own situation, our pensions and investments team can help