17 November 2022
If you are covering the news from the Autumn Statement that the pension’s lifetime allowance will not be frozen after 2026, please see the following comment from Jon Greer, head of retirement policy at Quilter:
"Future retirees will be pleased that the government have not announced any plans to continue freezing the lifetime allowance past 2026. Having done so would drag significantly more people into paying the charge each year. It is clear the government was treating pensioners and those about to retire with kid gloves during this budget likely because they see them as the only way to another election win in two years’ time.
"It is also worth remembering that one of the groups worst impacted by the lifetime allowance freeze is doctors and the uncomfortable consequence of maintaining LTA at the current level for longer would have also potentially meant there was a knock effect to NHS too.
"We know that the previous reductions in the lifetime allowance were linked to a number of doctors leaving the NHS, or reducing their hours significantly, because many doctors see the LTA as a cap to their pension and the point at which they should consider retiring or reducing their workload. Decisions on retirement had the LTA remained frozen may have been expedited. This would have meant there was a serious reduction in the number of highly experienced doctors leaving the profession at an already difficult time for the NHS.
"While today may be one of celebration for pensioners, uncertainty over the state pension age remains for those who are a few decades from retiring and we will have to wait and see what the review of the state pension age brings when its published in early 2023.
"The triple lock is eye wateringly expensive, and it seems inevitable that eventually push will have to come to shove and the policy is tweaked otherwise we will have this continual argument each year."
