Pension contributions (Table B)
The "earnings cap" for personal pension contributions
and occupational scheme benefits is set at £99,000 for 2003/04
(2002/03: £97,200). The maximum contributions for different
ages are set out in the table.
The Government has been consulting with interested parties about
another radical change to the pensions system. Detailed proposals
will be published in the summer, and may be in force as early as
April 2004. We have been assured that the new rules will preserve
the right to take part of the fund as a tax-free lump sum on retirement.
Child trust funds
One of the most striking proposals in the Budget speech is the
establishment of a trust fund for every child born from September
2002 onwards. This is intended to start with £250 from the
Government (£500 for children from families entitled to the
full Child Tax Credit), and parents and others will be able to contribute
to it. It appears the child will be free to spend the money on reaching
18. Further details are to be published later.
Life assurance policies
A number of detailed changes have been made to the taxation of
life assurance policies, attempting to remove anomalies and loopholes.
There has been speculation that the Chancellor could take away the
right to withdraw 5% tax-free each year from a policy - but
this right remains unchanged, except in connection with one very
specific tax avoidance scheme.