Aegon has called on the Chancellor to show commitment to pensioners and protect pension tax incentives from retrospective changes, amid speculation that there could be a tax raid on pensions.
As the UK contends with weak economic growth, Aegon pensions director Steven Cameron said there is “growing concern” that if the nation’s finances deteriorate further, the Chancellor may revisit the Autumn Budget for ways to balance the books.
Cameron said: “The Spring Statement made no less than 13 supportive comments about ‘working people’, suggesting the Government is prioritising support for them. However, pensioners and pension savers were offered no such words of comfort. It’s important the Government offers support where needed across all generations.
“Ahead of last year’s Budget, there were concerns that pensions and the tax incentives they enjoy were in the Chancellor’s sights. On the day, these were left largely intact, other than unused pensions on death being brought into scope of inheritance tax from April 2027. But fears of change led to many rushing to take their tax-free lump sum from their pension sooner than they’d otherwise planned.”
To avoid fear and “unhelpful” speculation ahead of this Autumn’s Budget, Cameron urged the Chancellor to commit to not making any retrospective changes to pension tax incentives.
Cameron said: “It would be of huge comfort if individuals knew their hard-earned pension savings won’t decrease in value after the Budget compared to the day before. Pensions are such long-term investments that individuals really do need stability and certainty that politicians won’t just ‘change the rules.”
He added: “The Chancellor may have wanted to distinguish between ‘working people’ and wealthy individuals who generate income from investments, rather than from ‘work’. The Government can rightly point to its continued commitment to the state pension triple lock which has just increased by an above-inflation 4.1%. But looking ahead, it’s vital that those putting aside part of their earnings today to save in a pension to live off in later life know the Government will continue to support them.”
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