What is changing?

To strengthen the UK labour market and incentivise people to remain in work, Chancellor Hunt announced significant changes to the limits on tax-relieved pension savings in registered UK pension schemes.

From 6 April 2023:

• The pension savings annual allowance will increase by 50%, from £40,000 per tax year to £60,000 per tax year. This is the maximum amount of money an individual can contribute to their pension each tax year without penalty.
• The lifetime allowance charge will be scrapped, with the lifetime allowance itself being formally removed from April 2024. This is the maximum amount of pension savings that people can build over their careers without penalty. Before being removed, the £1,073,100 limit was due to remain in place until 2026.

Why is this happening?

As the UK Government explained in their policy paper, the goal is to “encourage inactive individuals to return to work, in particular those aged 50 and above.”

It’s a response to statistics that show more and more Britons aged 50-64 leaving the workforce. With these changes, the Government hope to improve the financial incentive of work while still balancing pension costs. “Where individuals work longer, they will be able to save for longer, improving the adequacy of their private pension savings and supporting living standards in later life,” the policy paper reads.

What do these changes mean for you?

UK pension transfers tend to be complex because they involve navigating the intricacies of both the UK and New Zealand tax systems.

In this case, there may be tax implications for transferring your UK pension to New Zealand. To help you understand how these changes may affect you, we can put you in touch with expert accountants and tax specialists in our network. By leveraging their expertise, you can make informed decisions and optimise your financial position while adhering to all relevant rules and laws. Get in touch to learn more.

We’re in your corner

Whether you’re considering moving to New Zealand from the UK, or have recently moved, get in touch. We can help you understand if a UK pension transfer is right for your circumstances.

Click here to contact us or give us a call on 0800 UK 11 NZ.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance. Past fund performance is no guarantee of future returns.