Pension savers are being urged to check their retirement pots ahead of the forthcoming Autumn Budget.
For those currently retirement planning in Cheshire or Oswestry, it is suggested that savers might want to check they are contributing as much as possible.
Personal finance analyst, Rajan Lakhani, said that the Chancellor of the Exchequer, Rachel Reeves, is likely to freeze tax bands. For people with a personal pension, and in higher-rate or additional-rate tax brackets, higher contributions mean there is the prospect of tax relief on what savers put in. It can also help prevent their income from tipping into a higher tax band.
Currently, all pension policyholders are eligible for an automatic 20% basic tax relief on personal pension contributions. In practice, this means that for every £80 paid into the pot, £20 tax relief is added, leaving a total of £100. Tax relief is not automatically added for higher or additional rate taxpayers, which is why they might need to claim back tax relief via a HMRC self-assessment form, or risk missing out.
As it stands, savers are able to take anywhere up to 25% of a pension as a tax-free lump sum, up to £268,275. This applies to people aged over 55, or those turning 57 from April 2028 onwards.
Commenting on accessibility to tax-free cash, another financial analyst, Helen Morrissey, said she did not expect to see the imposition of restrictions. She added that this will come as a relief to people building a solid retirement income for later life.
