Tess Williams, Head of Financial Planning at Redmayne Bentley
New year, new financial goals? As 2024 gets underway many of us will be looking ahead, considering ways to navigate key financial ambitions like retirement or contemplating managing the impact of life-changing events like divorce. These are 3 key things to consider when planning finances for you and your family over the next twelve months.
Lifetime Allowance for Pensions
It will be interesting to see what the final legislation regarding the abolition of the Lifetime Allowance (LTA) exactly states when this is published shortly. We wait to see what opportunity it may present for some people who have previously been unable to make pension contributions to avoid breaking their LTA protection.
Regardless of how the legislation is worded, the clarification will afford those with pensions in excess of £1,073,100 the clarity needed to make informed decisions about what is best for them and their family in retirement.
Minimum Pension Age
The age at which personal pensions can be taken will increase to 57 in 2028. However, for those with pensions in place before February 2021, when the consultation paper was first published, there is uncertainty for individuals and providers alike as to what constitutes a “protected retirement age of 55.”
For Gen X, and particularly those born between April 1971 and 1973, the outcome of the final legislation will directly impact decisions about whether to take a pension at the age of 55 before the increase takes place or not. It may also mean those hoping to access their schemes for financial plans, such as early retirement, mortgage repayment, or even a trip of a lifetime, will know whether they have to make alternative arrangements. Currently, in the absence of certainty, people considering moving their pension from a provider, do not know if they would also lose a protected early retirement age or whether their pension age was destined to increase regardless.
Inheritance Tax Changes?
2024 brings the final pre-election budget and it will be interesting to see what the Chancellor uses this opportunity to deliver. Whether the lack of changes to Inheritance Tax planning in the Autumn Statement encourage a flurry in trust planning ahead of the Spring Budget on March 6 or not remains to be seen.
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This article is for information purposes only and does constitute personal advice. The information was correct at time of publication but may have changed at the point of reading.