The Chancellor has just announced some sweeping pension reforms as part of the Spring Budget. There had been rumours circulating that the Lifetime Allowance for pension savings was set to be increased from its current level of £1.073m to £1.8m. However, the Chancellor took everyone by surprise with confirmation that the pension Lifetime Allowance will be abolished entirely from April 2024 (although this will effectively be abolished from April 2023 with the removal of the Lifetime Allowance charge). There were two additional pension reforms announced alongside this:

• The pension annual tax-free allowance will be increased from £40,000 to £60,000. This means that you are now able to contribute up to £60,000 in pensions without incurring a charge. This is still subject to you having enough UK relevant earnings to justify the contribution.

• The Money Purchase Annual Allowance (MPAA) will be increased from £4,000 to 10,000. This means those who have previously triggered the MPAA (by flexibly accessing pension benefits, i.e. taxable income) can now contribute up to £10,000 into their pension without incurring a charge. Again, this is subject to UK relevant earnings.