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Budget 2023: The impact on personal allowances

Latest News

15 March 2023


Rick Hollington

WhiteHall City of Westminster

As Chancellor Jeremy Hunt unveils the contents of his first Budget in the House of Commons, we’ve pulled together the key points of interest from a financial planning perspective.

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The lifetime pension allowance has been abolished meaning that there is no longer a cap on the amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax (currently £1.07m).

In addition to this the tax-free yearly allowance for pension pots is to rise from £40,000 to £60,000 – having been frozen for nine years. This means that workers can contribute more to their pensions utilising the benefits of tax savings.


The economy

According to Jeremy Hunt, the Office for Budget Responsibility predicts that the UK will narrowly avoid a technical recession in 2023.

The size of the economy is predicted to shrink by 0.2% this year, before growing by 1.8% next year, 2.5% in 2025 and 2.1% in 2026.

Good news has also been predicted for the UK’s inflation rate which is anticipated to fall to 2.9% by the end of this year, down from 10.7% in the last three months of 2022.



It is no surprise to see the main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%.

Fairstone Chartered Planner, Rick Hollington said:
“The Spring budget is largely as expected, with no huge surprises. The abolishment of the pension lifetime allowance along with the increase to the annual provision means that as financial advisers we are able to look at further planning opportunities for our clients. Supporting their long-term planning needs and assisting them in creating the retirement that is right for them.”


For further insight and commentary on the 2023 budget visit our budget breakdown



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