Pension warning as savers face extra £165,000 tax bill ‘Alarming’ | Personal Finance | Finance

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The cost of living crisis continues to wreak havoc on the nation’s finances as experts forecast that pension savers who are working hard to fund their retirement could be £165,000 worse off because of soaring inflation.

Former Chancellor Rishi Sunak froze the limit at which people have to start paying tax on their pension savings at £1,073,100 for five years in 2021.

Without the freeze, the lifetime allowance would have increased to £1,372,600, according to pensions experts Aegon.

This means the threshold will fall by £234,000 to £839,131 if inflation remains at 10 percent next year – wiping more than a quarter off the limit in real terms by 2025. 

READ MORE: Santander Regular Saver offers 2.5% interest and £175: ‘Top account’

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