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2021/22 budget changes affecting pensions

In the budget given on 3 March 2021, two announcements affected pensions, namely the Lifetime Allowance and the State Pension.
Lifetime Allowance
The most significant change announced was that the Lifetime Allowance is to be frozen at its 2020/21 level of £1,073,100 for tax years 2021/22 through to 2025/26. Normally this would increase annually in line with the Consumer Prices Index.
 
This announcement potentially adversely affects a number of individuals who may be building up significant pension benefits although some people will have protection which will mitigate or extinguish the impact of this change.
 
Annual Allowance, Tapered Annual Allowance and Money Purchase Annual Allowance
No changes were announced in respect of the standard Annual Allowance which remains at £40,000 nor the Tapered Annual Allowance for certain higher earners. The Money Purchase Annual Allowance also remains unchanged at £4,000 for those who have flexibly accessed income from a defined contribution pension arrangement.
 
More details about the Lifetime Allowance, Annual Allowance, Tapered Annual Allowance and Money Purchase Annual Allowance can be found in the article How are my benefits taxed?
 
State Pension
The full new single tier State pension will rise by 2.5% in the 2021/22 tax year from £175.20 to £179.60 per week in line with the triple-lock guarantee.
 
General - taxation of pensions
Despite speculation, tax relief applied to pensions currently remains unchanged.