Kay Ingram: Sunak's LTA freeze creates 'bizarre disincentive'

Pre-Budget rumours that tax relief on pension savings would be reduced to a standard rate, rather than the more generous marginal income tax rate of 40p or 45p in the pound did not surface in Sunak's second Budget instead, he chose to freeze the lifetime allowance (LTA) until 2026. The LTA is the total value which an individual can take from all their private pensions with the benefit of tax -free growth. Once the allowance is used up a lifetime allowance charge is levied at 25% if the excess is drawn as income (also subject to income tax) and at 55% if drawn as a lump sum. Freez...