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It looks like Labour are likely to win the General Election – it is theirs to lose.  Will Labour getting into power impact on existing pension legislation?  It’s difficult to answer this question.  Typically, 50% of what is outlined before an election never gets changed after the election.  That won’t be a surprise to anyone.

In any case, we have certainty about the legislation in place today. If you do think that legislation could change in future, it may be beneficial to act now if you are able to do so.

Areas of concern:

The Lifetime Allowance.  This was abolished on 06/04/2024 and we no longer have a cap at £1,073,100.00 for total pension benefits.  In press coverage today, it looks like Labour may not re-introduce the Lifetime Allowance.  This would be complex and send the wrong message to pension funders, impacting on senior staff in the NHS and Education etc.

Best left alone for all.

Pension Contributions

On 06/04/2023, the maximum annual pension contribution was increased to £60,000.00 gross per annum from £40,000.00 gross per annum.  We also have the ability to carry forward any unused allowances for the previous three tax years.

Labour could limit pension contributions, but again this would impact on senior staff in the NHS and Education etc.

Tax Relief

It has been suggested that Labour will remove marginal rate tax relief for personal pension contributions at 20%, 40% and 45%, to replace it with a tax relief on personal pension contributions of 30% for all (subject to standard contribution rules).

If you are funding your pension personally and you are a higher or additional rate taxpayer, this would not be good news.


Tinkering with pension legislation all the time is not good news.  As it can impact on our long-term planning, we need to have stable pension legislation, legislation that we can trust.  This is one area of politics that should have cross party agreement and a long-term plan.

The State would like us to fund our own pensions and not be wholly reliant on the State Pension.

What can we do?  We have certainty over the rules we have in place today.  If we are not sure what the rules will be under Labour, and you want to utilise the rules we have now and have the capacity to do so, you could take action now by making a large pension contribution for example.

Please take advice from an IFA before making any decisions.  Personally, I’m still hoping that pension legislation won’t change again – we will see.

Steve Speed