The Treasury has confirmed the government will go ahead with its plans to increase the Lifetime Allowance (LTA) in line with inflation from next April.
Following the recent changes in government, there had been doubt over whether indexation plans announced by former chancellor George Osborne in the 2015 Budget would go ahead.
A Treasury spokesperson said: "As announced in 2015, the LTA for pension contributions will increase according to the Consumer Prices Index (CPI) from 2018."
At the 2015 Budget, Osborne also announced the LTA would be cut from £1.25m to £1m from April 2016.
Barnett Waddingham senior consultant Malcolm McLean said: "Although the increase on the £1m LTA will not be huge, CPI increase is currently running at 2.6%, and will provide some welcome relief for those currently on the threshold of exceeding the LTA.
"It might also suggest that despite the fact the chancellor will almost inevitably be looking to make savings on government expenditure, in his coming Autumn Budget, he will not be making further cuts to the LTA below the current level.
"That said, and despite secretary of state for work and pensions, David Gauke's recent "assurances" about the retention of pension tax relief, I am doubtful that we can feel fully confident that pensions will escape totally unscathed from further cutbacks before the end of the present parliament."
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