Savings and Pensions
The investment limits for 2022/23 remain £20,000 for a standard adult ISA (within which £4,000 may be in a Lifetime ISA – unchanged since 2017/18), and £9,000 for a Junior ISA or Child Trust Fund.
Pension contributions (Table B)
The tax reliefs for pension contributions remain unchanged. As announced in the March 2021 Budget, the Lifetime Allowance (LA), which is the maximum amount that a person can save in tax- advantaged pension schemes before extra tax charges arise on certain events (including drawing benefits and reaching age 75), is frozen at its 2020/21 level of £1,073,100 until the end of 2025/26. As with the increases in income tax generally due to the freezing of rate bands and allowances, this fixing of the LA is likely to bring many more people within the scope of the LA Charge that applies when pension benefits are taken from funds valued above this limit.
Contributions to a registered pension scheme by individuals and their employers are restricted by the Annual Allowance (AA). Where this is exceeded, an AA Charge arises. The taxpayer can choose to ask the pension scheme to pay an AA tax charge if it exceeds £2,000, reducing the future pension benefits instead of having to meet the liability personally. The deadlines for ‘Scheme Pays’ reporting and payment will be extended in circumstances where there is a delay in the individual receiving the information that shows they are liable to the charge. The new rules take effect from 6 April 2022, but also have retrospective effect to 6 April 2016.
Taking pension benefits
The minimum age at which most people can first access their tax-advantaged pension scheme benefits is currently 55. This will be increased to 57 with effect from 6 April 2028, and will therefore affect those who were born on or after 6 April 1973.