The lifetime allowance of tax-free pension savings is being scrapped in April
One of the largest shake-ups in two decades to the way that pensions are taxed is due to come into effect next month, affecting all people drawing money for their retirement. From April 6, the cap at which pension savings start incurring a tax charge will be removed.
From next week, the lifetime allowance will be replaced by two new taxes on lump sum withdrawals, which could catch some pensioners out. The LSDBA allows up to £1,073,100 of your remaining pension allowance to be transferred to a beneficiary on your death, tax free. However this will be reduced by the amount in lump sums that you received during your lifetime and could even impact on the tax paid by the beneficiary of your pension - as it will also affect their allowances, unless paid as an annuity or drawdown.
Despite this lack of clarity, the chartered Financial Advice and Services organisation have some advice for concerned pensioners.
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