Millions of people who are contributing to private or employer-sponsored pension plans have received a warning from Martin Lewis. There is still a way to leave this money to a loved one even though you cannot include a pension in your will, according to the founder of MoneySavingExpert.
The consumer champion told viewers of The Martin Lewis Money Show Live on Tuesday that you need to fill out an Expression of Wishes form with your employer.
This will guarantee that the appropriate person receives your pension. The chancellor did not mention one change, however, that also aims to encourage older people to continue working, according to Mr. Lewis, in his address to Parliament.
The financial expert made note of the fact that individuals in particular situations will be able to contribute more to their pensions.
Increase of annual allowance
According to the budget paper, the government will increase the annual allowance from £40,000 to £60,000 ($48,000 to $63,000) as of April 6, 2023. Any unused annual allowances from the three prior tax years may still be carried forward.
This is the maximum amount you can invest in pension funds during a tax year (from 6 April to 5 April) without incurring tax obligations.
The money purchases annual allowance (MPAA), which replaces your annual allowance after you’ve started to draw your pension pot, will also be increased from £4,000 to £10,000 ($4,800 to $12,000), and the minimum tapered annual allowance from £4,000 to £10,000 ($4,800 to $12,000) from April 6, 2023.
Mr. Lewis also outlined what he believed to be the justification for the Chancellor’s adjustments to the allowance. He continued, “Of course, he says the pension changes are all about helping older people in their fifties and above who are thinking about not working—and actually encouraging them to work.”
Among the measures announced in the budget was a major expansion of state-funded childcare, aimed at boosting economic growth. Mr. Hunt also revealed he would add £11 billion to Britain’s defense budget in the next five years.