Autumn Budget: Lifetime allowance increase confirmed
Budget papers have confirmed the lifetime allowance (LTA) for pensions will increase to £1,030,000 for the tax year 2018/19.
The increase, which happens in April next year, will be calculated in line with the change in CPI over the 12-month period between September 2016 and September 2017 rounded to the next £100.
Budget supporting documents also confirmed the increase to the state pension linked to the triple lock. The rise in April 2018 will be 3%, a cash increase of £3.65 per week for the full basic state pension, it said.
It added:"The benefits of the triple lock uprating will also be passed on to the poorest pensioners through an increase to the standard minimum guarantee in pension credit to match the cash rise in the basic state pension. This will be paid for through an increase in the savings credit threshold - the savings credit starting point. The full new state pension will also be increased by the triple lock, rising by £4.80 per week."
Aegon head of pensions Kate Smith said:"As expected, today's Budget confirmed that the State pension will increase by 3% next April from £159.55 to at least £164.37 giving pensioners an annual rise of £250.
"However, those who reached state pension age before 6 April 2015 and are on the old basic state pension will only see their entitlement increase from £122.30 to £125.97 a week, giving an annual increase of only £191."
She added it was fortunate there was no U-turn on the LTA increase.
"Following a series of reductions, this is good news for savers, even if on the surface the increase isn't large. A small increase is welcome for those nearing the limit, but this is a complex area and people seek financial advice to avoid paying unnecessary tax."