Martin Lewis highlights ‘important’ pension change not mentioned in Spring 2023 Budget

Finance expert Martin Lewis has highlighted one “important” change to pensions that the Chancellor did not mention in the Spring Budget.

Chancellor Jeremy Hunt announced changes to pensions in the Budget on Wednesday, including the removal of the lifetime allowance.

However, there was one change that the Chancellor did not mention in his speech to Parliament – which also aims to encourage older people to continue working, according to Lewis.

Finance expert Martin Lewis has highlighted one “important” change to pensions that the Chancellor did not mention


The financial expert pointed out that people can put more money into their pensions under certain circumstances.

According to the budget document, the government will increase the annual allowance from £40,000 to £60,000 from 6 April 2023. Individuals can still transfer unused annual interest from the previous three tax years. This is the maximum amount you can save in your pension banks in the tax year (April 6-April 5) before you have to pay taxes.

The money withdrawal annual allowance (MPAA), which replaces your annuity after you’ve started withdrawing your pension pot, will also be increased from £4,000 to £10,000 and the minimum annual allowance reduced from £4,000 to £10,000 from 6 April. 2023.

Mr Lewis said: “However, I think perhaps the change that will be of most interest to pensioners is the one he didn’t mention, which is the withdrawal allowance going from £4,000 a year to £10,000 a year. What that means now is the amount that people who are who have already taken pension money, can deposit their pension.

“So at the moment the annual allowance is £40,000 and this is £4,000. So take all the money out of your pension and suddenly you can only put £4,000 into it. But in future the annual allowance will be £60,000.

British Chancellor of the Exchequer Jeremy Hunt gesturing poses with the budget box in Downing Street


“Take all the money out of your pension, you can still put away £10,000 a year, which is enough for most people.”

Lewis also brought up what he believes is the reason for the Chancellor’s compensation changes. He added: “And of course he says the changes to pensions are meant to help those people who think they’re going to be out of work – the over-50s who think they’re going to stay in work, by encouraging them to work.

“And I think that withdrawal allowance would be a big deal.”

Among the measures announced in the budget was a significant expansion of state-funded child care to boost economic growth. Hunt also revealed he would add £11 billion to Britain’s defense budget over the next five years.

He said the Office for Budget Responsibility (OBR) is now predicting that the UK will not fall into a technical recession this year and that the government will “meet the Prime Minister’s targets to halve inflation, reduce debt and get the economy growing”.

Hunt said that despite “continued global volatility”, the OBR expects UK inflation to fall from 10.7% in the last quarter of last year to 2.9% by the end of 2023.

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