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Extending Pension Savings
A Private Members Bill which is designed to extend pension auto-enrolment has received Royal Assent. A consultation on implementing the new measure now has to take place but it should eventually open up the way for younger workers and those on lower salaries to automatically join their employer’s pension scheme. At present the threshold for auto-enrolment is earnings of £10,000 for those aged 22 and over, although those of any age earning more than £6240 can opt in.
Meanwhile, new information has cast a spotlight on the maximum amount which an individual can save into their pension in one year. In the year to April 2022, more than fifty-three thousand individuals reported that they exceeded their pension allowance figure; with those excesses amounting to £1.2billion, up by some 50% from the previous year.
What effect the rise in the threshold announced for the current tax year from £40,000 to £60,000 will have remains to be seen. However, as the threshold is also subject to income variables, these new figures on breaches of pension allowances do help to illustrate the importance of taking professional advice on pension contributions. If you are looking for advice on pensions, or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.