The scrapping of the pension Lifetime Allowance (LTA) in this year’s Budget is having a dramatic impact on pension saving and retirement planning amongst higher rate tax payers, new research1 from leading wealth manager Investec Wealth & Investment shows.

Removing the £1.073 million limit on pension saving ended a disincentive for retirement saving which had led to higher earners retiring early and major tax penalties of 55% for lump sum withdrawals and 25% plus income tax for income tax withdrawals for those who breached the allowance. Most recent HMRC data2 shows 8,610 LTA charges worth £382 million were reported by pension schemes.

Investec Wealth & Investment’s study with higher rate taxpayers has found that ditching the LTA has driven major changes with nearly six out of 10 (59%) taking a range of actions as a result.

More than half (51%) say they have restarted, increased or plan to increase pension contributions. That includes 16% who had stopped pension saving because they had reached or were close to the LTA . Those who have already increased pension payments say they are putting in an additional £650 a month.

Nearly a quarter (23%) say they have delayed their planned retirement or will probably delay retirement plans because they can save more into their pension. Around 10% say they have come out of retirement as a result while another 6% say they are planning on coming out of retirement.

Ade Babatunde, Financial Planning Director at Investec Wealth & Investment said: “Scrapping the Lifetime Allowance was a surprise in this year’s Budget and it seems to have been very much welcomed by those who have built significant wealth across their pensions and by higher and additional rate tax payers.

“It’s worth remembering that the LTA was £1.5 million when it was first introduced in 2006 and went as high as £1.8 million at one stage so the gradual reduction meant it potentially affected more and more taxpayers and was having a major impact on the amount they were willing to contribute to their pensions.

“Abolishing the LTA simplifies some decisions around retirement and estate planning but also makes it more important that people seek independent advice on pensions due to the changes in tax treatment.”

The Office for National Statistics 2021 Wealth and Assets Survey revealed that the wealthiest 10% hold around half of all wealth, primarily in the form of private pensions and property. Many of these individuals will be advised by the 5,000 + Independent Financial Adviser Firms in the UK.

Simon Taylor, Head of Strategic Partnerships at Investec Wealth, believes the removal of the LTA will result in increased advice given in this area. He said: “With the FCA’s Retirement Income Advice review calling pensions advice into sharp focus, this whole area of advice will be in the spotlight for some time to come.”

Investec Wealth & Investment works closely with individual clients and their professional independent financial advisers to plan and manage their wealth, to help deliver optimal returns on their investments and bring financial peace of mind.

As one of the UK’s leading wealth management companies Investec Wealth & Management focuses on a relationship-based approach to Financial Planning and Investment Management with the purpose of making a tangible and meaningful difference to clients and their families.



Notes to Editors
  1. Investec Wealth & Investment commissioned independent research agency Viewsbank to interview 1,070 UK adults aged 18-plus between June 16th and 19th 2023 which included 146 higher rate taxpayers
  2. Private pension statistics commentary: September 2022 - GOV.UK (

For more information, please contact:

Investec Wealth & Investment (UK)

Anita Turland

07769 682373

Perception A

Phil Anderson

07767 491519

About Investec Wealth & Investment

As one of the UK’s leading wealth management firms, we are trusted with managing £40.7 billion (as at 31 March 2023) of our clients’ money. Our wealth teams work hard at providing Out of the Ordinary levels of service to our clients and with an investment heritage dating back to 1827, we’re built for the long term.

Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange and the Investec Group. Investec Wealth & Investment Limited is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN

Investec Wealth & Investment (UK) is a trading name of Investec Wealth & Investment Limited which is a subsidiary of Rathbones Group Plc. Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN.