UCL Human Resources


The 2023 Spring Budget and Pensions Tax

21 March 2023

Update on important changes to pensions taxation taking effect from 6 April 2023.

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In last week’s budget, the Chancellor announced significant changes to the current Pensions Tax regime. From 6 April 2023, the tax charges applied to the excess of the Lifetime Allowance (the total amount you could build up in all your pension savings without incurring a tax charge) currently set at £1.073 million, will no longer apply. The Lifetime Allowance will be abolished, in full, with effect from 6 April 2024. The tax-free cash component of pensions savings, however, will continue to be set at 25% of the current Lifetime Allowance of £1.073 million.

In conjunction with the changes to Lifetime Allowance, the Annual Allowance (the limit on the amount of money you can build up tax free in your pension in any one tax year), currently set at £40,000, will increase to £60,000 with effect from 6 April 2023.

We are aware that these changes may affect some scheme members' future planning. Further and more detailed information on the changes to pensions tax and how they affect you will be issued by UCL’s pension schemes in the coming weeks.

If you are considering increasing your contributions to a UCL Pension Scheme for the next tax year, then you may wish to consider first seeking Independent Financial Advice