Your final chance to guard against Rachel Reeves' £95k raid
Crisis-hit households have just days left to safeguard their savings from the shadow chancellor's savage tax hike.
Rachel Reeves’s plan to raid pension funds could cost the average saver a staggering £95,000, analysis reveals. The shadow chancellor has proposed a stealth tax that would hit millions of people saving for their retirement.
Now, a leading financial expert has warned that time is running out for savers to protect their nest eggs. From April 6, the lifetime allowance on pension contributions will be slashed from £1.073million to £950,000.
How will the pension tax changes affect you?
The lifetime allowance is the maximum amount you can save into a pension before you start to pay tax. Once you reach the lifetime allowance, you will be taxed 55% on any additional contributions.
Reeves's plan would reduce the lifetime allowance by £123,000. This means that anyone who has already saved more than £950,000 into their pension could be hit with a hefty tax bill.
But there is a way to protect your savings from this stealth tax. By taking action before April 6, you can lock in the current lifetime allowance of £1.073million.
How to protect your pension savings
There are several ways to protect your pension savings from Reeves's stealth tax:
- Make additional pension contributions before April 6. This will allow you to lock in the current lifetime allowance of £1.073million.
- Withdraw some of your pension savings before April 6. This will reduce the amount of money you have in your pension pot, and therefore reduce your potential tax liability.
- Transfer some of your pension savings to a spouse or civil partner. This will allow you to split your pension pot, and therefore reduce your potential tax liability.
It is important to seek professional financial advice before making any decisions about your pension savings. A financial adviser can help you to assess your individual circumstances and recommend the best course of action.
