Treasury plans autumn pensions tax raid – reports

The Treasury is planning a pensions tax raid in the autumn to help cover the cost of government spending during the COVID-19 pandemic, according to reports.

The Telegraph revealed that possible interventions at the Autumn Budget include lowering the lifetime allowance, introducing a flat rate of tax relief and taxing employer contributions.

One idea being discussed would see the pensions lifetime allowance reduced from a little above £1m to £800,000 or £900,000, lowering the point above which extra tax charges kick in.

Reported changes would also see individuals contributing to pensions getting the same rate of tax relief, meaning that higher-rate taxpayers would lose out.

AJ Bell senior analyst, Tom Selby, described the speculation around the plans as “inevitable”, but warned that all three of the proposed pension tax reforms would be “hugely risky” for the government.

“All three of the pension tax reforms apparently in the Chancellor’s sights would be hugely risky, hitting directly at heartland Conservative voters and undermining the foundations being laid by automatic enrolment,” Selby said.

“Introducing a flat-rate of pension tax relief, an idea often touted by think-tanks, would present genuine practical challenges and would likely result in tax rises for public sector workers in defined benefit schemes, including many of the NHS staff who have been rightly praised as heroes during the pandemic.

“The lifetime allowance has already been cut to the bare bones, while employers would likely be furious if the government increased their pension costs just as many attempt to recover from a nightmare year.

“Any further reforms – and in particular cuts in pension tax relief – need to be mindful of the impact on savings incentive over decades.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.