The Friday Takeaway: Rumours and realities
About 15 years ago, in my early days as a pensions journalist, I attended an industry event shortly before a Budget speech. One panellist, a financial adviser, raised the prospect of changes to pension tax relief, saying that some of his clients had been rearranging their retirement plans to prepare for such a change.?
I immediately phoned the story into the newsdesk (no smartphone or social media for me back then) and it set the ball rolling for a front-page story for what was then called Pensions Week.?
Of course, the tax changes never materialised. But the idea has never gone away, and regularly resurfaces when discussing how the government can save a little more money.?
So it was this week, when a promotional email for the Pensions and Lifetime Savings Association’s annual conference inadvertently sparked a flurry of rumours about tax relief changes. The trade body was quick to shoot these down, but a somewhat evasive answer from the chancellor to a question in the House of Commons earlier this week is unlikely to have calmed many fears.
I am not going to speculate about what will be in the Budget, but I am absolutely determined to ensure that working people are better off. Under the last government the tax burden reached its highest level for 70 years, and ordinary working people paid the price for that. This will be a Budget to fix the foundations of the economy after the mess left by the last government, to rebuild Britain, and to make working people better off.
(Chancellor Rachel Reeves speaking in the House of Commons on 3 September)
My immediate reaction was one of scepticism: the tax system is already far too complicated to risk further muddying the waters. A system-wide change would come at a huge cost, and potentially affect vital preparation work for dashboards. Recent experience with the abolition of the lifetime allowance may suggest to the government that pensions tax is best left alone for now.?
That said, the previous government ploughed on with the abolition despite not being ready for it, and we’re still dealing with the consequences. We shouldn’t completely discount the possibility of the chancellor deciding to overhaul tax relief on pension contributions, and telling the industry to just get on with it.?
Still, it’s not like any of us are that busy, is it??
Enjoy your weekend.?
This article originally appeared in Pensions Expert’s weekly Friday Takeaway email newsletter. To sign up, please register for free for our alerts.?
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