Lib Dems seek £40,000 cap on tax-free pension lump sums

Also plan to scrap NI on contributions

James Phillips
clock • 2 min read

The Liberal Democrat party has passed a motion pledging to cap tax-free lump sums under pension freedom at £40,000 if elected into government.

Delegates at the party's annual autumn conference yesterday (18 September) approved plans to reduce tax advantages for higher earners, using the new revenue streams to provide perks for younger workers. Moved by the party's leader in the House of Lords, Lord Newby, the motion - Promoting a fairer distribution of wealth - aims to "combat inequality and raise revenues for public services and investments". It said: "Wealth inequality is economically and socially damaging, and is contributing to a growing intergenerational, geographical and class divide. It [the motion] calls for the tax ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

James Phillips
Author spotlight

James Phillips

Professional Pensions journalist from 2016-2022

More on Pensions

DWP publishes state pension age communications action plan

DWP publishes state pension age communications action plan

Government confirms plan to develop strategy with ‘timely’ and ‘modern’ communications

Martin Richmond
clock 25 June 2026 • 4 min read
Ros Altmann: A pensions manifesto for the new prime minister

Ros Altmann: A pensions manifesto for the new prime minister

Ros Altmann says pension funds could be a 'silver bullet' to revive UK growth

Baroness Ros Altmann
clock 25 June 2026 • 6 min read
Scottish Widows launches pension tracing tool

Scottish Widows launches pension tracing tool

Some 3.3 million pension pots are 'lost' in the UK

Holly Roach
clock 24 June 2026 • 1 min read