Freezing the Lifetime Allowance, CGT and IHT thresholds penalises pensioners and savers and will hamper the UK’s economic recovery

3 March 2021

Freezing the Lifetime Allowance, CGT and IHT thresholds penalises pensioners and savers and will hamper the UK’s economic recovery

PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, is deeply concerned by the Chancellor’s Budget announcement  to freeze the Lifetime Allowance for pensioners, as well as the Capital Gain Tax and Inheritance Tax thresholds until 2026.

Simon Harrington, Senior Public Policy Adviser at PIMFA, comments: 

“We are dumbfounded that the Chancellor has frozen the Pension Lifetime Allowance until 2026. Doing so penalises pension savers looking to secure their future and in the most extreme cases sees people left with no choice but to give up work. Freezing the lifetime allowance could see a number of people inadvertently exceed their allowance and, as we have seen previously with NHS workers, incur a 55% tax hit which they otherwise would not have to pay.

“Freezing both the Inheritance Tax and Capital Gains Tax also discourages the public from investing in our economy at a time when the Chancellor himself admits we need an investment-led recovery.

“Whilst we strongly believe that there should be focus on repairing public finances, freezing the thresholds for Inheritance Tax, Capital Gains Tax and the Lifetime Allowance attacks individual personal finances and aspiration. Covid has shown how fragile the UK’s consumption driven economy can be. We need to become a more resilient and investment driven country. This cannot be achieved without the savers and investors that would be most hit by these changes.”

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
• PIMFA has made numerous recommendations to the FCA regarding the Future of Supervision and the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

• Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376 / +44 (0) 7843 903258
• Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225