Britain’s retirees warned about Hammond’s likely pension raid
Britain’s highest earners should consider reviewing their pension tax relief plans ahead of an expected raid by chancellor Philip Hammond in November’s Budget.
The warning from Nigel Green, the founder and CEO of deVere Group, one of the world’s largest independent financial advisory organisations, follows the Daily Mail reporting that an unnamed senior government source said Mr Hammond had identified some £38bn in pension tax relief as “one of the last remaining pots we can raid.”
Mr Green comments:
“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.
“It could be that this story was deliberately leaked in order to drip-feed to the public the Treasury’s intention – and take away the element of surprise.
“However, it does also allow people time to prepare.
“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.
“If Mr Hammond does announce this measure, it would be another hammer blow for those who have worked hard to get ahead in life through prudently saving for their future.
“Continually raiding pensions tax relief is helping to undermine a culture of saving at time when it has never been more necessary to promote it.
“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.”
The deVere CEO concludes:
“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.”