Savings and Pensions
The ISA investment limits for 2019/20 remain £20,000 for a standard ISA and £4,000 for a Lifetime ISA. The limit for Junior ISAs and Child Trust Funds rises from £4,260 to £4,368. The Government will consult on regulations to deal with what happens when the very first Child Trust Funds mature in the near future.
Pension contributions (Table B)
There has been some speculation that the Chancellor would take steps to reduce pension tax relief, which he himself recently described as ‘eyewateringly expensive’. In the event, he did not mention the subject in his speech, and no changes were hidden in the documents – apart from the second annual inflation-linked increase in the Lifetime Allowance (LA).
The LA is the maximum amount that a person can save in tax-advantaged pension schemes. The value of benefits is measured against the LA when benefits are first taken from a pension, and also on some other occasions, including the individual’s 75th birthday. The LA will increase in line with inflation from £1.03 million to £1.055 million from 6 April 2019.
The limit on contributions to tax-advantaged pension schemes remains £40,000 per year for those with income up to £150,000 (£110,000 if the pension contribution is paid directly into the scheme by an employer). The limit is tapered away as income increases above £150,000, until it is only £10,000 when income reaches £210,000. The limit is also reduced to £4,000 for anyone who has drawn more than the tax-free lump sum from an existing money-purchase pension fund.