State pension increase
Millions of pensioners are set to see an 8.5% increase in their state pension payments, equivalent to up to £901 a year. This rise will take effect from April 2024. However, experts warn that some pensioners may face higher tax bills as a result.
Pension Credit rise
Pension credit, a tax-free benefit designed to help those on a low income, will also increase by 8.5% in 2024. This means that single households could see their minimum payment rise from £201.05 to £218.15.
Scrapping of lifetime allowance
From April 2024, the lifetime allowance (LTA) on pension savings will be abolished. This will benefit around 2 million middle-class Brits, allowing them to contribute more money to their pension pot without incurring hefty tax charges.
Pension triple lock to stay
The government has confirmed that the triple lock system, which determines the annual increase in state pension payments, will continue. This means that pensioners will receive an £901 rise in state pension payments in line with the 8.5% increase.
Pot for life
The government is considering introducing a "pot for life" scheme, which would allow savers to choose the pension scheme they are automatically enrolled in. This aims to simplify the system and prevent pension pots from getting lost. No official plans have been made yet, but a consultation may begin next year.
Auto-enrolment changes
The government has been granted the power to lower the age limit for automatic enrollment in workplace pensions from 22 to 18. This aims to help more people save for retirement. The changes are set to be introduced in 2024.
Overall, 2024 is shaping up to be a significant year for pension changes. From increased state pension payments to the scrapping of the lifetime allowance, these changes will impact millions of people. It's important to stay informed and make the most of these opportunities to secure a better retirement.
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