State pension contributions can help Britons avoid Sunak’s 55% tax burden | Personal finance | Finance

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Public pensions and retirement savings often work together to support people in retirement. However, retirement savings could face a staggering 55% tax due to a recent benefit freeze.

The lifetime pension allowance is the maximum that a person can hold in their professional and personal pensions while continuing to receive retirement benefits.

Individuals may not think their savings will exceed the current limit of £1,073,100, but they could find themselves rocketing above the barrier in years to come.

The Chancellor’s five-year freeze on the Lifetime Allowance means many could find themselves taxed simply because of inflation.

However, according to an expert, state pension contributions could be the solution to avoiding the burden.

READ MORE: State pension payments confirmed to increase this year

Voluntary contributions also do not always increase an individual’s state pension.

Therefore, people are also encouraged to contact the Future Pensions Center to find out if they will benefit.

The government also states that individuals may wish to seek financial advice before deciding to make voluntary contributions.

Further information is also available on the government website.

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