Budget to boost lifetime allowance for pension savings

In an effort to encourage people to continue working, Chancellor Jeremy Hunt plans to use his Budget to increase the lifetime allowance for pension savings to up to £1.8m. 

This would address government concerns that higher wage earners, such as doctors and consultants, retire earlier. 

The annual cap on tax-free pension contributions may also be raised from £40,000 to £60,000, which is expected to benefit millions of workers. Currently, any excess over the lifetime allowance of £1.07m is subject to a tax charge. 

The allowance has been seen as an issue in the medical profession, with some doctors and consultants reducing their hours or retiring early from the NHS. 

The government has also been considering ways to coax retired middle-aged workers back into jobs to boost the economy.

The Spring Budget will be released on Wednesday.