The Government has refused to commit to a Pension Tax Lock ahead of the Budget, in response to a petition by AJ Bell.
To date, the petition has gathered over 18,500 responses.
Following mounting speculation that the Government may make changes to pensions in the upcoming Autumn Budget, the investment platform launched a campaign for the Government to commit to a Pension Tax Lock, delivering more certainty for pension savers.
However, the Government’s response to AJ Bell refused to confirm any plans regarding pension tax-free cash and tax relief on contributions.
Instead, it pointed to the Pensions Commission, which it said will look at what is required to ensure the system is strong, fair and sustainable.
The Government said: “With regard to the proposed ‘pension tax lock’, the Government does not comment on proposed tax changes or tax related speculation ahead of Budgets.
“The Government recognises the importance of promoting confidence in pension saving and is committed to ensuring future generations of pensioners have security in retirement.”
Tom Selby, director of public policy at AJ Bell, said: “Side-stepping calls for stability in pension tax rules ahead of the Budget gives the Government an easy get out clause for now, although it means savers are subjected to at least another five weeks of uncertainty.
“Nonetheless, the level of support our Pension Tax Lock petition has generated sends a clear message to government: moving the goalposts on pension tax incentives is not the way to promote confidence in retirement saving.”
Selby said that the Government’s response suggests it could look to the Pensions Commission for an opinion on the future of pension taxation, meaning immediate reform should be off the table.
“If this is the intention, as an absolute bare minimum, Chancellor Rachel Reeves should pledge not to make any changes to the pension tax system at least until the Commission reports, removing uncertainty in the immediate term, allowing time for the entire pension landscape to be considered in the round and for the implications of any changes to be carefully thought through,” he said.
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