Pension tax hit

1.2m workers face 55% pension tax hit Ian Browne of investment house Quilter has warned that more than a million workers will be hit with 55% tax bills on their pension savings as they breach the upper limit on how much can put be into a retirement pot tax free. While the lifetime allowance was designed to affect only the wealthiest 5,000 people, analysis by pension provider Royal London suggests 1.25m non-retired people are set to exceed the limit. The lifetime allowance has been frozen for the next five years at its current level of £1,073,100 and savers who withdraw anything above this limit as a lump sum face a 55% tax. Mr Browne said: “Our calculations show that someone with a £500,000 or £600,000 pension pot that is 15 years from retirement will be forced to hand over some of their hard-earned cash to the taxman.”