Leaving the pension tax system untouched tops investors’ wish list ahead of the Autumn Budget next month.
According to interactive investor, more than a third (36%) of investors voted for the pension tax system to be left alone.
Reforming the inheritance tax framework also featured highly, with 19% of respondents citing this. The same proportion (19%) said they would like the Government to cut stamp duty on UK shares in the Autumn Budget.
Additionally, some 13% felt that support for businesses should be the Government’s top priority, while 9% urged the Chancellor to focus on simplifying the ISA landscape. Only 5% voted for policies to help first-time buyers.
Craig Rickman, personal finance expert at interactive investor, said: “It’s little surprise that investors desperately want the Government to avoid making further changes to pension tax.
“Speculation about reform in this area ran wild before the past two budgets. And although some of the key rumours fortunately didn’t materialise, notably cuts to the tax-free cash element, the changes that were proposed, coupled with the weight of the pre-event reports, have understandably left a mark on investors.
“With most unused pension savings forming part of inheritance tax calculations from April 2027, and the salary sacrifice cap arriving two years later, there are concerns that further tightening to the retirement tax framework might be in train, with policymakers viewing pensions as low-hanging fruit when seeking to raise additional revenues.”
Rickman said investors need continuity and consistency so they can plan ahead with confidence.
“While reform is often necessary to keep pace with the UK’s retirement challenges as they evolve, any policy change must focus on encouraging people to build sufficient future wealth and help retirees make sensible decisions with the savings they’ve accumulated. Chipping away at the tax advantages of pensions risks having the opposite effect.
“With the rumour mill ahead of this year’s event beginning to shift through the gears, it’s crucial the Government urgently provides clarity about its intentions for the future of pension taxation – otherwise there’s the very real risk of history repeating itself,” he added.
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