Budget to boost lifetime allowance for pension savings

The Chancellor could also increase the £40,000 annual cap on tax-free contributions to pensions.

It is expected millions could benefit from the rise - which would address government concerns that people earning higher wages retire earlier, particularly doctors and consultants.

The Treasury said it will not comment.

Currently, the so-called lifetime allowance - the amount you can accumulate in your pension pot before extra tax charges - is £1.07m.

The amount workers can save into a pension before paying tax is also expected to rise to as much as £60,000 from the current £40,000.

The move is part of government plans to persuade workers to stay in work for longer, expected to be a big part of chancellor Jeremy Hunt's Spring Budget on Wednesday.

UK economic growth has flatlined in recent months and the Bank of England expects the UK to enter a recession this year. Many industries have struggled to recruit workers, though job vacancies are falling.

The government has been considering plans to coax retired middle-aged workers back into jobs to try to boost the economy, with reports older workers could be offered a "midlife MoT" to assess finances and opportunities for work.

Earlier this year, Mr Hunt pledged to consider changes to encourage the over-50s who had taken early retirement during or after Covid to return to work, saying he "would look at the conditions necessary to make work worth your while."

-bbc