In his 2021 Budget, the Chancellor announced a five-year freeze on the lifetime pension allowance. What does this mean for you and your retirement fund?

What is the lifetime pension allowance?

The lifetime pension allowance sets a limit on how much you can save in your pension before you start paying tax on anything over the limit. For a few years before the 2021 announcement, the limit had been tied to inflation, meaning that it rose in line with the cost of living.

With the global pandemic and surge in inflation over the past couple of ...

At 6.00 am on Monday 17 October, the Treasury issued a press release announcing that the (new) Chancellor, Jeremy Hunt, would making a statement “bringing forward measures from the Medium-Term Fiscal Plan”. The timing of the press release suggested that the Treasury was concerned it had not done enough the previous Friday to calm markets ahead of the end of Bank of England gilt purchase support.

The Chancellor’s statement was in two parts: firstly, a pre-emptive media statement in the morning, then an official statement to the House of Comm...

US: Inflation remains elevated

Inflation data showed that whilst increases in wholesale prices were slowing down, this was not yet filtering down meaningfully to consumers. Core consumer prices, which excludes food and energy, rose 6.6% on year-on-year basis in September. This was more than expected, above the previous March peak, and the fastest pace in four decades. Stocks fell sharply on the news but quickly rebounded – clearly highlighting how quickly sentiment changes and how difficult it is to predict market reactions to significant n...

US: How aggressive will the Fed be?

The S&P 500 rose for the first time in 4 weeks. Markets started the week strongly on Monday & Tuesday, with the S&P 500 rising over 5% across the two days. Data showed the economy appeared to be slowing more quickly, potentially paving the way for The Federal Reserve to slow down on interest rate hikes. Inflation worries picked up again as the OPEC+ group of oil exporters announced a cut in daily production on Wednesday. The price of oil rose as a result. Towards the end of the week there were also signs ...

US: S&P500 slips back to Nov 2020 levels

Investor sentiment was rocked by the turmoil in UK markets and signs that inflation remains elevated, paving the way for the Federal Reserve to continue raising interest rates aggressively to tackle inflation. The S&P 500 slipped back to November 2020 levels and closed a third consecutive quarter of falls for the index for the first time since 2009.

Japan: Economic challenges outside Japan weighs on markets

Markets fell despite some encouraging economic data. Concerns about the outlook for the glob...

Kwasi Kwarteng’s first set piece as Chancellor of the Exchequer was never going to be easy, even before the 0.5% increase in interest rates the day before. The new Prime Minister Liz Truss revealed much of what we might expect before Mr Kwarteng spoke a word, so we already knew that there would be:

• a two-year £2,500 Energy Price Guarantee (EPG) for consumers;
• similar but shorter-lived support for businesses and other non-domestic energy users;
• cuts to National Insurance Contribution (NIC) rates; and
• a reversal of the planned April 2023...

US: Federal Reserve (‘Fed’) hikes aggressively

The Fed increased interest rates by 0.75 percentage points, bringing interest rates to a target range of 3-3.25%, the highest level since March 2008, which it was cutting rates. This week the Fed announced that it expects interest rates to continue rising over the next few months. Whilst the central bank believes that inflation will trend downwards in 2023, it also acknowledged the risk that sharp interest rate hikes could lead to a recession.

Japan: Government intervenes to support currency

US: Stocks break a string of three weekly losses

Stocks broke a string of three weekly losses, as investors appeared to grow more confident following several weeks of losses. Data suggesting inflation was moderating also boosted sentiment. Oil prices declined and at one point hit their lowest level since Russia’s invasion of Ukraine. There was no major economic data released in the US during the week.

Japan: New package to cope with rising inflation

The government announced a new package to help cope with rising inflation, including ca...