LTA freeze: Rishi Sunak sends 'wrong message' to pension savers

'Under the radar revenue raiser'

Jenna Brown
clock • 6 min read

Rishi Sunak’s decision to freeze the lifetime allowance (LTA) for pension contributions has been widely criticised by pensions experts who say the move sends the “wrong message” to savers.

Sunak confirmed the decision to freeze the LTA, along with capital gains tax, inheritance tax and income tax brackets, in today's Budget speech. The LTA will remain at its current level of £1,073,100 for 2020/21 rather than increasing in line with inflation. It had been expected to rise by £5,800 in 2021/22, in line with 0.5% Consumer Prices Index.  In a widely predicted move - it was leaked last week - the freeze is estimated to raise an extra £990m in revenue by tax year 2025/26. Canada Life technical director Andrew Tully said: "This measure simply sends the wrong signal to save...

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

More on Pensions

Mind the (widening) gender pensions gap

Mind the (widening) gender pensions gap

‘A terrifying outcome for women in retirement’

Caitlin Southall
clock 14 January 2026 • 4 min read
Pensions body warns MPs on salary sacrifice change impact

Pensions body warns MPs on salary sacrifice change impact

Employers and employees will ‘face higher costs’ from salary sacrifice changes

Jasmine Urquhart
clock 14 January 2026 • 2 min read
Many savers fear smaller pension pots after salary sacrifice reforms

Many savers fear smaller pension pots after salary sacrifice reforms

Two-thirds think changes will mean paying more National Insurance

Jasmine Urquhart
clock 08 January 2026 • 2 min read