Pensions and savings
ICAEW Tax Faculty provides analysis of the announcements relating to the taxation of pensions and savings in the 2018 Budget.
Pensions tax relief
Contrary to much press speculation there was no change to tax relief on pensions.
In line with existing policy (as announced in Spring Budget 2015) the lifetime allowance, the maximum that can be saved into a pension fund without incurring an excess tax charge, increases in line with CPI to £1,055,000 for 2019/20.
The annual subscription rate for an adult individual savings account (ISA) remains at £20,000 but subscription limits for Junior ISA and Child Trust Funds (CTF) will increase in line with CPI to £4,368 for 2019/20.
CTF are savings accounts that were available for babies born between 1 September 2002 and 2 January 2011 which could be used to deposit free cash vouchers handed out to each child by the government. Further funds could be added by parents and others subject to the annual limit. The accounts cannot be accessed until the child reaches age 18 so the first accounts will be unlocked from September 2020; the government will issue a consultation in 2019 on draft regulations for maturing CTF accounts.