Chancellor cuts pension contribution limits and lifetime allowances

The Chancellor has finished his third Autumn Statement in the House of Commons at 1.21pm, with cuts to the pension contribution limits and the lifetime allowance. While the first half of the speech focused on growth, he focused his second part on tax and pensions.The annual contribution limit to pensions was reduced from £50,000 to £40,000, a move widely predicted by economists over the past few days and one many planners feared.The lifetime allowance was reduced from £1.5m to £1.25m. Mr Osborne said 98 per cent of people approaching retirement had pensions worth less than £1.25m with the average pension amount being £55,000. Drawdown capped limits are to be raised from 100 per cent to 120 per cent.He will also raise the ISA limit to £11,520 from next year and allow small and medium sized business listed on AIM to be included in stocks and shares ISAs.Benefits are to be no longer index-linked for the next three years and will be capped at increases of one per cent per year.The nil rate of inheritance tax is to be increased by one per cent to £329,000 in 2015-16.Mr Osborne also focused on tax abuse and said: "There are still too many people who legally avoid taxes and don't pay their fair share." He said more would be spent on clamping down on tax avoidance and that it expected corporate taxes to be paid by multi-national companies.Corporation tax for large companies will be reduced by one per cent to 21 per cent in April 2014, the lowest rate in a Western economy, in a bid to attract more companies to Britain.He ended by saying: "Today we have helped working people. The public know there is not a miracle cure, just hard work. Borrowing is down, jobs are being created, it is a hard job but we are making progress."• Financial Planner Online has been extensively covering the Autumn Statement with live coverage of the announcements on the day and comments from leading experts afterwards. We are also be tweeting live via our feed @FPM_Online.• A special section to cover the Autumn Statement has been set up on our home page – click on Autumn Statement to get all the news.• Don't forget to tell us what you think, either Tweet your comments, direct message us or email your views to This email address is being protected from spambots. You need JavaScript enabled to view it. • You can also email your comments to: This email address is being protected from spambots. You need JavaScript enabled to view it. Check back here and at the website throughout the day for more updates on what the Autumn Statement will mean for Financial Planners and wealth managers and their clients.

Chancellor cuts pension contribution limits and lifetime allowances

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