The recent tax report by Julie Baron and her colleagues of Vialto Partners on The View From The Top looked at changes to UK pensions.
Recently, the UK has announced some significant changes in the pensions arena in its spring budget. The most notable change is the removal of the lifetime allowance of 1.1 million from April 2023, which will be completely abolished by April 2024. This is great news for individuals who are already over those limits, as they potentially face no punitive charges on exit and can continue saving.
In addition, the annual allowance for contributions into a UK pension has been increased from £40,000 per annum to £60,000 per annum for high-income taxpayers who earn over £360,000. This means that individuals can save more into their pension and reduce the cost of their assignment, potentially bringing more loyalty to the companies they work for.
These changes offer an opportunity for employers and employees to re-evaluate their pension arrangements, particularly for highly compensated employees, to see whether there is more scope to make contributions to pension plans. It is important for everyone in the UK to take the opportunity to review their pension position, whether they are going on an international assignment or approaching retirement. Furthermore, global mobility colleagues employed in the UK should take a look at their own pension position, as everyone is impacted by these rules as it affects the UK.
Overall, the changes in the UK's pension arena can potentially benefit individuals, employers, and the economy. It is important for employers and employees to take advantage of these changes and make the necessary adjustments to their pension plans to ensure a financially stable retirement.
Watch the complete tax update here:
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