It’s been an eventful year for the world of pensions, with the UK government introducing a number of changes to the pensions product and markets beginning to recover after a huge drop in the market in 2022. Expert and Head of Personal Finance, Brian Byrnes, summarises the events of 2023 and explains what we could expect to see in 2024.


Pension reform in Spring and Autumn 

This year, we saw proposed changes to the pension in both the Spring Budget and Autumn Statement. Here’s a recap:



  • The Lifetime Allowance (LTA) was scrapped. The LTA was the maximum amount of retirement wealth you can build across all your pensions (both workplace and personal) before tax charges apply. This maximum previously sat at £1.07m, meaning that any amount above this limit could be subject to LTA tax charge up to 55%.
  • The Annual Allowance (AA) rose from £40,000 to £60,000. The AA is the maximum you can pay into any pension(s) in a given tax year. That includes employer and employee contributions into a workplace pension, as well as personal contributions into a personal pension. 
  • The Money Purchase Annual Allowance (MPAA) went up from £4,000 per year to £10,000 per tax year. The MPAA replaces your annual allowance once you start withdrawing money from your pension and means that you can only put a smaller amount back into your pension thereafter.


State Pension

  • The State Pension age stayed put, despite rumours of an increase
  • The triple lock will stay in place into the next financial year, meaning the State Pension will increase by 8.5% in line with inflation.


A ‘pot for life’

  • The government proposed intentions to explore a ‘pension pot for life’, which would give workers the right to require employers to pay their contributions into an existing pension pot.
  • Moneybox will be assessing what this means for our customers and partaking in the consultation.


  Read about the Spring Budget and Autumn Statement in more detail.


Pension performance in 2023

Throughout 2023, pensions have largely still been in recovery from the impact of Covid-19 and the Russian invasion of Ukraine, which evoked volatility in the market. In fact, 300 top pensions globally saw a 13% drop – equating to $20.6 trillion. 

In a bid to tackle high inflation, the UK government increased interest rates consistently throughout 2022-2023 which in turn disrupted equity and bond markets. Typically, when interest is high, bonds become less valuable and earn less interest.


Why does this affect pensions?

Pensions are invested in a diverse range of assets including shares and bonds, which are affected by the aforementioned volatility. With interest rates and inflation still high across 2023, pensions have been slow to show signs of recovering. 


Looking to 2024

Following decades-high interest rate rises, inflation has been steadily falling for the second half of 2023. Plus, in November, interest rates were higher than inflation for the first time in 2023. All of this indicates that we could see inflation continue to decrease throughout 2024, which is positive news for pension performance. 


And while most of the headlines you may have seen this year around pensions have been negative, performance for Moneybox pension funds have been quietly positive. So if you continue to contribute to your pension and consolidate any lost pots you have, the markets will do the rest.


Important to know

As with all investing, the value of your pension can go up and down, and you may get back less than you invest.

Tax treatment depends on individual circumstances and is subject to change.