The new tax year often brings about pension changes. This article will give you a helpful insight into what’s changed and what is set to stay the same for 2023/24.
Pension Increase
Pensions are increased each April to keep up with the cost of living. This year pensions will increase by 10.1%.
This increase is applied to everyone – those receiving their pension, those pensions savings are yet to be paid out, and those who are still saving into their pension.
The increase is based on the Consumer Price Index (CPI) from the previous September and is set by law.
The basic state pension will also increase by 10.1%. Full details on the Pensions Increase can be found on our Pensions Increase page.
Contributions
For those paying in, contribution rates have changed following the Government’s yearly review. Your contribution rate is simply a percentage of your pay that goes into your pension, and ultimately how much you pay in depends on how much you earn. You can use our Contribution Rate calculator to see what your rate is.
If you pay more into your pension via Additional Pension Contributions (APCs), the maximum amount of APCs you can purchase has now increased £7,294. More information on APCs can be found here.
Tax
There are two tax limits in regard to pensions; Annual Allowance and Lifetime Allowance.
Annual Allowance is the amount you and your employer can pay into your pension in a year before you incur a tax charge. The Annual Allowance has increased to £60,000. However higher earners (those with a taxable income of £260,000+) have a reduced or tapered Annual Allowance. More information can be found on our Tax page.
Lifetime Allowance was the total amount of pension you can have without triggering a tax charge. The Lifetime Allowance has been abolished and will no longer apply from the 6th April 2023.
These are the main financial changes which are applicable to pensions. Some or all of the changes may affect you depending on your circumstance but if you have any concerns or queries you can contact the Fund through one of the options at Contact Us.
