Martin Lewis has pointed out a vital change to pensions that was not mentioned in the Spring Budget.
On Monday (March 15) Chancellor Jeremy Hunt delivered his fiscal statement which introduced a wide range of changes to pensions across the country. This includes a multi-billion pound pensions giveaway in the hopes of bringing people back into the workforce.
However, there was one other big change which the Chanellor did not mention in Parliament - which also aims to encourage older people to continue working, according to Mr Lewis. The money-saving expert pointed out that people in certain circumstances will be able to put more money into their pensions.
According to the Budget paper, the government will increase the annual allowance from £40,000 to £60,000 from 6 April 2023. Individuals will continue to be able to carry forward unused annual allowances from the three previous tax years. The is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay tax.
The money purchase annual allowance (MPAA) will also be increased from £4,000 to £10,000 and the minimum tapered annual allowance from £4,000 to £10,000 from 6 April 2023. The MPAA replaces your annual allowance after you’ve started to draw your pension pot.
Read more: Price of cigarettes and wine set to increase despite Jeremy Hunt's 'Brexit' pubs guarantee
Mr Lewis said: "I think perhaps the most interest change to pensions, though, is one he didn't mention, which is the money purchase allowance is going up from £4,000 a year to £10,000 a year. Now, what that means, that's the amount that those people who've already taken some pension money are allowed to put in their pensions.
"So currently the annual allowance is £40,000 and this is £4,000. So take any money from your pension and suddenly you can only put £4,000 in it. But in future, the annual allowance is £60,000.
"Take any money from your pension, you'll still be allowed to put £10,000 a year in, which is enough for most people."
Mr Lewis also pointed out what he thinks is the reasoning behind the Chancellor's changes to the allowance. He added: "And of course, he says the changes to pensions is all about helping those people who are thinking about not working - older people in their fifties and above who are thinking about not working, actually encouraging them to work.
"And I think that that money purchase allowance would be a big one in there."
Read next:
The 10 key announcement's from Jeremy Hunt's Spring Budget including childcare changes
The groundbreaking deal that will change Greater Manchester forever
'We have to wear so many layers just to keep warm - now my baby is always sick'
Authorities 'underestimated' risks posed by man who killed sister on caravan holiday
