Labour has said it would reinstate the pensions lifetime allowance (LTA) if elected, arguing that the government's plan to abolish the allowance is the “wrong priority, at the wrong time, for the wrong people”.

Chancellor, Jeremy Hunt, announced plans to abolish the LTA as part of his Spring Budget yesterday (15 March), alongside increases to the annual allowance, money purchase annual allowance, and the tapered annual allowance.

However, in a statement following the Budget, Labour branded the changes a “gilded giveaway”, with analysis from the party suggesting that the change would save the richest 1 per cent around £45,000 when accessing their pension

Shadow Chancellor, Rachel Reeves, stated: “The Budget was a chance for the government to unlock Britain’s promise and potential. But the only surprise was a one billion pound pensions bung for the one per cent, a move that will widen the cost of living chasm.

“At a time when families across the country face rising bills, higher costs and frozen wages, this gilded giveaway is the wrong priority, at the wrong time, for the wrong people.

“That’s why a Labour government will reverse this move. We urge the Chancellor and the Conservative government to think again too."

However, industry experts emphasised the need for long-term stability to allow savers to plan for retirement, with Canada Life technical director, Andrew Tully emphasising that savers need "confidence the goal posts won’t constantly shift".

“You simply can’t play political ping pong with the pensions system," he argued. "We need cross party consensus on issues like this to deliver the stability required or else we seriously risk wrecking savers retirement plans.

“There are already restrictions in the system limiting pension savings and tax breaks - just let the annual allowance do the job its designed to do.”

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