{"id":21267,"date":"2025-04-15T06:29:08","date_gmt":"2025-04-15T06:29:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/21267\/"},"modified":"2025-04-15T06:29:08","modified_gmt":"2025-04-15T06:29:08","slug":"rachel-reevess-40bn-tax-raid-on-pension-savings-could-come-at-the-expense-of-workers","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/21267\/","title":{"rendered":"Rachel Reeves’s \u00a340bn tax raid on pension savings could ‘come at the expense’ of workers"},"content":{"rendered":"

A rumoured \u00a340billion tax raid on pension savings<\/a> by Chancellor Rachel Reeves could “come at the expense” of Britons with workplace retirement funds, analysts warn.<\/p>\n

Under the Chancellor’s proposed reforms, companies will be allowed to access defined benefit (DB) pension surpluses with a 25 per cent tax charge.<\/p>\n

It is understood that Labour’s potential move would allow firms to access \u00a3160billion in DB pension surpluses.<\/p>\n

This would loosen existing safeguards that protect pensions from riskier investments. Under the proposals, any money drawn down would instantly be hit with a 25 per cent tax charge<\/a>.<\/p>\n

\"Rachel<\/p>\n

Analysts are warning over the potential impact of the rumoured policy being drawn up by Rachel Reeves <\/p>\n

GETTY <\/p>\n

This would provide a much-needed boost for Reeves as she seeks to avoid breaching her own fiscal rules<\/a>. Approximately 8.8 million people are currently members of defined benefit schemes across the UK.<\/p>\n

Romi Savova, the CEO and Founder of PensionBee<\/a>, has weighed in on the Chancellor’s plans. <\/p>\n

“Tapping pension surpluses to boost economic growth can be a well-considered approach provided it doesn’t come at the expense of member security,” she said.<\/p>\n

She warned that any approach would need to consider various economic scenarios, including potential interest rate reductions and stock market volatility.<\/p>\n

“These funds ultimately belong to pension savers and must be treated with the utmost care,” Savova added. <\/p>\n

She questioned why more surpluses are not being passed back to savers directly.<\/p>\n

“The Government must tread carefully – trust in pensions is hard won and easily lost.” <\/p>\n

Concerns about the reforms have been echoed by pension scheme members themselves.<\/p>\n

In a recent poll of 1,000 members of defined benefit schemes, conducted by the Pension Insurance Corporation, 60 per cent said the Government’s plans would put their pensions at risk.<\/p>\n

\"Pensioner<\/p>\n

Pension pots are at risk of being liable for paying extra tax<\/p>\n

GETTY <\/p>\n

Consultants at Hymans Robertson estimate that around \u00a3160billion could be available for companies to draw down from these pension funds.<\/p>\n

Options for using the cash include paying more to shareholders, increasing spending on their business or making investments elsewhere. <\/p>\n

The Government is due to report back in the spring with full details of its reforms, instead of during the Autumn Budget later in the year.<\/p>\n

Stephen Lowe, director at retirement specialist Just Group, has warned that the move could reduce pensions and lead to riskier investments.<\/p>\n

“Most commentators have been fixated on how this surplus is going to be funnelled into building UK reservoirs and bridges, but they’ve missed a more immediate benefit the Chancellor is targeting \u2013 tax revenue,” he said.<\/p>\n

“For every \u00a310billion of pension funds surplus extracted, \u00a32.5billion goes straight into the Treasury’s bank account.”<\/p>\n

LATEST DEVELOPMENTS:<\/strong><\/p>\n

\"HMRC<\/p>\n

The Government is looking for ways to raise tax revenue <\/p>\n

PA <\/p>\n

Lowe emphasised that protecting pensions must be the first priority of any pension scheme.<\/p>\n

“Extracting surplus and making riskier investments, before pensions have been guaranteed, could lead to less money in the scheme and therefore put retirements at risk,” he warned.<\/p>\n

The rumoured proposal also comes as the Government bids to attract investment in British infrastructure and the beleaguered London stock market.<\/p>\n

Nausicaa Delfas, chief executive of the Pensions Regulator, said: “Where schemes are fully funded and there are protections in place for members, we support efforts to help trustees and employers consider how to safely release surplus.”<\/p>\n","protected":false},"excerpt":{"rendered":"A rumoured \u00a340billion tax raid on pension savings by Chancellor Rachel Reeves could “come at the expense” of…\n","protected":false},"author":2,"featured_media":21268,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,528,1232,617,2499,285,619,3028,512,1200,16,3106,15],"class_list":{"0":"post-21267","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-labour-party","11":"tag-money","12":"tag-pensions","13":"tag-personal-finance","14":"tag-politics","15":"tag-rachel-reeves","16":"tag-savings","17":"tag-sgg","18":"tag-tax","19":"tag-uk","20":"tag-uk-politics","21":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114340571689701267","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/21267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=21267"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/21267\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/21268"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=21267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=21267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=21267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}