Budget 2015: Lifetime allowance cut to £1m ahead of indexation plans

The lifetime pension saving allowance has been cut from £1.25m to £1m in the Budget today.

Chancellor George Osborne confirmed the cut in his final Budget before the general election.  He also announced from 2018 the lifetime allowance for pensions would be indexed. There will be no changes to the annual allowance, howver. Currently savings of up to £40,000 a year qualify for tax relief, but there is an upper limit of £1.25m over the lifetime of a pension pot, following which a tax charge of 55% applies. The limit has been cut several times since its introduction in 2006, falling from £1.5m in April last year, following a reduction from £1.8m in 2011. Even if the allo...