What is Jeremy Hunt’s pensions giveaway and who gains most?

theguardian.com:

Jeremy Hunt’s multibillion-pound tax giveaway to Britain’s wealthiest pension savers is coming under fire from various quarters, with Labour vowing to reverse the move andothers saying it is like using a sledgehammer to crack a nut.Financial firms have said the changes to pension allowances could let high earners who can afford it build up pension pots worth as much as £9m while enjoying the full tax benefits.He has announced a massive boost to the amounts that high earners can put away for their retirement tax-free.Hunt abolished the pensions lifetime allowance, which is the limit on how much people can build up in their pots over their lifetime while still benefiting from the tax perks for doing so.

Up until now, anything over £1.07m was subject to a tax charge of up to 55%. It applies to all personal and workplace pensions, but excludes the state pension, and was due to be frozen at its current level until 2026.

Instead of increasing the allowance, as had been rumoured before the budget, he scrapped it.The chancellor also increased the annual allowance – which is the most someone can save in their pension pots in a single tax year before having to pay tax – from £40,000 to £60,000.The government argues it was forced to act because the lifetime allowance has led many professionals including NHS consultants and GPs to take early retirement, and there have been predictions that more and more older public and private sector employees would change their behaviour or retire early to avoid being hit by penalties.Hunt has said that “if you talk to anyone in the NHS, they will say doctors leaving the workforce because of pension rules is a big problem”.