“Pension tax relief ‘cost’ hits £27bn”

Jan 12, 2023 | Tax

An independent (financial adviser’s) view

The next Budget is a couple of months away. And it may actually be called a Budget this time; Jeremy Hunt’s was an ‘Autumn Financial Statement’, and Kwasi called his, accurately for all the wrong reasons, a ‘Game-Changing Fiscal Statement’. At pretty much every actual Budget since I’ve been in the business, man and boy, there’s been a rumour that tax relief on pensions would either go, be reduced to a flat rate of say 30%, or be limited to the basic rate. The big rush to get in quick just in case has always been great for financial advisers and hasn’t done our clients any harm, as their minds have been focused on the advantages of pension planning for a couple of weeks at least. So, what are the odds of something happening on 15th March? Is the release of these figures the start of some ground-laying? And, crucially, how many votes would a limit to the basic rate lose? Not many, I’d say. Of course, that won’t save anything like the headline figure of £27bn, and suddenly making workplace pensions more expensive for the majority would be a definite electoral coffin nail, were any more needed. But every little £bn helps and few Chancellors, sadly, can resist a little low-impact (for them) pension tinkering.

Read more here

5 pieces of banknotes on yellow and white textile
“Rachel Reeves may be forced to raise taxes”

“Rachel Reeves may be forced to raise taxes”

Why did she/they (in the old sense) think that tinkering around with IHT and CGT would be enough to sort out the NHS; and the potholes; and…and the list goes on. My guess is  that they asked the Treasury for a list of anything not involving income tax that they could get away with lightly, although they should already have learned from the winter fuel stuff that all publicity is not good publicity.