Lifetime allowance (LTA)

The LTA will no longer form part of the pensions tax regime from 6 April 2024, as recently legislated for in the Finance Act 2024. However, two new allowances, the lump sum allowance (£268,275, subject to any transitional protection) and the lump sum and death benefit allowance (£1,073,100, subject to any transitional protection) will place new constraints on the lump sum benefits that can be drawn with no tax charge.


Investing in pensions. You may be able to make much larger pension contributions because the annual allowance has gone up to a maximum of £60,000 and the lifetime allowance will have been abolished.

Annual allowance (AA)

The AA for pension contributions will remain at £60,000 for 2024/25. The AA is subject to tapering when an individual’s threshold income exceeds £200,000 and their adjusted income exceeds £260,000. The minimum AA resulting from the application of the taper rules will stay at £10,000 (applying when adjusted income is £360,000 or more).

The money purchase annual allowance (MPAA), which applies to those who have drawn pension benefits flexibly, will also remain at £10,000.

Pensions relief relating to net pay arrangements

The Finance (No 2) Act 2023 provides for HMRC to make top-up payments from 2024/25 to individuals who have a total income below the personal allowance and who save into a pension scheme using a net pay arrangement. Top-up payments should be made as soon as possible after the tax year in which the contribution is paid.

Financial Conduct Authority (FCA) Value for Money (VFM) proposals

The FCA’s consultation on VFM will include proposals to require the publication of contract-based defined contribution (DC) default funds’ historic net investment returns and a breakdown of their UK investments. The proposals will require schemes to compare their performance, costs and other metrics with those of at least two schemes managing over £10 billion in assets, a level that is expected to increase significantly over time.

In consultation with the FCA, the government will introduce legislation at the earliest opportunity to apply the VFM framework across the market. The Pensions Regulator will be provided with new powers to ensure key disclosures are in place by 2027.

Individual savings accounts (ISAs)

A consultation paper has been published on the creation of a UK ISA, which could invest in UK shares or other UK-oriented investments, possibly including corporate bonds and gilts. The new UK ISA will have a subscription limit of £5,000 in addition to the existing £20,000 ISA allowance.

The ISA annual subscription limit for 2024/25 will remain at £20,000 and the corresponding limit for junior ISAs (JISAs) and child trust funds (CTFs) will stay at £9,000. Several technical changes to ISAs take effect from 6 April 2024, including a rise in the minimum opening age for cash ISAs to 18; the end of restrictions on subscriptions to multiple ISAs of the same type within the tax year (except for Lifetime ISAs); and the lifting of the ban on partial transfers of current year ISA subscriptions between ISA managers. 

NatWest retail offer

A sale of part of the government’s NatWest shareholding to retail investors will take place this summer at the earliest. The government intends to fully exit its shareholding in NatWest Group by 2025/26, subject to supportive markets.

British Savings Bonds

National Savings & Investments (NS&I) will launch the British Savings Bond in early April 2024. This will offer consumers a guaranteed interest rate that will be fixed for three years.

Investor definitions

Legislation will reinstate the previous (pre-31 January 2024) eligibility criteria for an individual to qualify as a high-net-worth or sophisticated investor. There will be further work to review the scope of the exemptions.

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