Pension hammer blow as number of retirement millionaires plummets

Pensioner surprised to find she'd lost a pension

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According to new data, Britain now has 1,000 fewer actively contributing personal pension millionaires. The numbers were obtained following a Freedom of Information request by Investing Reviews to HMRC.

The taxman shared overall millionaire numbers among active contributors to Relief at Source schemes dropped by 37 percent last year.

Instead of 2,700 contributions, there are now only 1,700 putting in to their pot.

The news follows a period of global stock market volatility, which has turned the pension industry upside down.

The data stated there were 1,600 investors with personal pension pots worth £1million to £1,999,999.

The remaining millionaires are sitting on pots worth over £2million.

The data released to Investing Reviews showed there are currently 1,100 taxpayers still paying into personal pension schemes, despite their existing pots exceeding the Lifetime Allowance.

The Lifetime Allowance limits how much a person can save throughout their lifetime while still being entitled to tax relief.

Exceeding this sum means people may be subject to a 55 percent tax.

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At present, the LTA is £1,073,100 and has been at this level since 2020/21. 

It was during his time as Chancellor that Rishi Sunak made the decision to freeze the LTA until 2025/26.

Rumours are already circulating the new Chancellor Jeremy Hunt could take bold action on Thursday and freeze the LTA once again, for an extra two years.

The matter remains to be seen, and all eyes are now on the Autumn Statement. 

Critics of the Lifetime Allowance have suggested people do not fully understand the tax and may suffer as a result. 

Simon Jones, CEO of Investing Reviews, said: “Pension pots have taken a hammering in recent times as global stock markets have gone into retreat. 

“Even the wealthy are feeling the pinch.

“Investors with long-term investing horizons can take heart from the fact that, historically, markets have always rebounded. 

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“But it’s a different story for those who were hoping to retire in the near-term. 

“Many will now either have to work a little longer, or develop alternative income streams to help them manage the squeeze.”

A Treasury spokesperson previously told “The Lifetime Allowance was frozen to ensure the sustainability of the public finances and the current threshold means savers can put over £1million into their pension completely tax-free.”

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