Five key changes to state pensions and other retirement plans to watch out for this year | Personal Finance | Finance

Major changes to in 2024 will affect pension recipients and savers including another large boost to the state pension.

Experts at Hargreaves Lansdown have looked at some of the key developments taking place this year and how they will affect Britons.

Helen Morrissey, head of retirement analysis, said: “2024 could see the foundations laid for some truly huge developments.

“The lifetime pension will give members extra choice in building pension savings on their own terms while helping combat the issue of lost pots and the lifetime allowance moves ever closer to the exit.

“The introduction of an online system should also make it much easier for people frustrated with long call wait times to buy the National Insurance credits needed to plug gaps in their record.”

State pension increase

The state pension is going up by 8.5 percent in April with the full new state pension increasing from £203.85 a week to £221.20 a week.

The full basic state pension is increasing from £156.20 a week to £169.50 a week. Ms Morrissey said: “Debate around the cost of state pension will continue to rage and it will be interesting to see whether support for the triple lock will be a feature of any key party manifestos.”

The end of the lifetime allowance

This is set to be scrapped in April 2024, removing tax charge for savers who accrue £1,073,100 in pensions.

Once the policy has been scrapped, income and lump sums from pensions valued above the LTA will be subject to income tax at the beneficiary’s marginal rate.

Ms Morrissey said: “Its removal sounds easy in practice, but the reality is that the industry has to get to grips with a complex set of rules before this can happen.

“The other concern is that Labour has said they will reinstate the allowance if they get into Government though it is to be hoped that their stance will soften in the coming months.”

The lifetime pension

Details about this new policy were set out in the autumn statement, allowing employees to ask their employer to pay their contributions into a pot of their choice.

The policy could help avoid lost pensions as a person could avoid accruing several pension pots as they change jobs, but rather just pay into one pot.

The extensions of auto enrolment

A bill to lower the minimum age for auto enrolment from 22 to 18 and extend the policy to any amount of earnings has had Royal Assent, but the policy has not moved further.

Ms Morrissey said: “It’s to be hoped it is hovering near the top of the new pension minister’s in-tray for action in the New Year.”

Buying voluntary National Insurance contributions

The DWP has extended the deadline to buy voluntary NI contributions until April 2025. The department also said it would introduce an online system to reduce call wait times.

The online system has yet to be introduced with the experts predicting it will be introduced in the Spring.

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