The Labour Party is being urged to go beyond reinstating the lifetime allowance (LTA) on pension contributions and address ‘overly generous’ pension tax breaks for wealthy savers. This could potentially affect doctors in the NHS pension scheme.
The Institute for Fiscal Studies (IFS) recommends Labour quickly reintroduce the LTA, previously set at £1,073,000, which was scrapped by Chancellor Jeremy Hunt. To ease transition issues, the IFS suggests setting the LTA at a higher level, such as £1.8 million adjusted for inflation.
Other IFS recommendations include reducing the tax-free pension savings percentage and imposing inheritance tax (IHT) limits on pensions. Labour has committed to no income tax or national insurance increases if elected but has yet to detail its pension reform plans.
Please get in contact if you require any help regarding your NHS pension or IHT planning.