High earners warned to tackle tax plans before the Budget
13 September 2018
Britain’s highest earners should ensure their tax relief plans are in order ahead of a potential government raid on pension pots, deVere Group has warned.
The warning follows reports that Chancellor Philip Hammond has identified some £38bn in pension tax relief as a possible target for the Treasury’s November Budget.
Nigel Green, founder and CEO of deVere Group (pictured), said: “The Chancellor has huge funding gaps to fill in public services and it can be expected that pensions will again be attacked to bolster government coffers. Such a raid on people’s hard-earned retirement nest eggs would highlight once more that successive British governments consider people’s retirement savings as easy, low-hanging fruit to be plucked when necessary.”
Green said that while the story may have been leaked in order to “drip-feed” the Treasury’s intention to the public, it does provide pension savers with time to prepare.
Green continued: “As it is likely the pension contribution relief for those on higher incomes will be reduced, many might now consider making a larger one-off contribution before the Budget, in order to benefit from the higher tax relief whilst they still can.”
However, deVere Group said a raid on pension relief would be a “another hammer blow” for those who have worked hard to save for their retirement years and warned that it would undermine a culture of saving at a time when the government should be focusing on encouraging people to put money aside.
Green added: “We’re all living longer, meaning savings need to last longer, debt levels are high, care and health costs are climbing and financial security is ever more a personal responsibility. It is almost inevitable that pension tax relief will be a target as the government looks to plug gaps in November’s Budget. Many high earners will, as a result, be considering a review of their options sooner rather than later.”
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