launched earlier this month<\/a> and signed by more than 18,500 people, calls on the Chancellor to publicly pledge not to alter the pension tax-free cash entitlement or contribution tax relief during this Parliament.<\/p>\nTom Selby, AJ Bell\u2019s director of public policy, criticised the government\u2019s refusal to rule out near-term changes, warning that continued ambiguity risks undermining saver confidence.<\/p>\n
\u201cSide-stepping calls for stability in pension tax rules ahead of the Budget gives the government an easy get-out clause for now, although it means savers are subjected to at least another five weeks of uncertainty,\u201d he said.<\/p>\n
Selby said the response suggests any review of pension tax incentives could be deferred until the Pensions Commission concludes its work, but he urged the Chancellor to provide immediate reassurance.<\/p>\n
\u201cIf this is the intention, as an absolute bare minimum, Chancellor Rachel Reeves should pledge not to make any changes to the pension tax system until the Commission reports. That would remove uncertainty in the immediate term and allow time for a full assessment of the pension landscape,\u201d he added.<\/p>\n
Selby warned that altering pension tax rules would amount to breaking the longstanding \u201ctax pact\u201d between savers and the state.<\/p>\n
\u201cThe government has at least acknowledged the importance of the pension tax pact between savers and the taxman, under which Brits can defer income tax until retirement and benefit from a 25% tax-free entitlement. Changing the rules before people retire would be an absolute betrayal of those still working hard to build up their pensions, who deserve the right to retire on the same terms as the generation before them,\u201d he said.<\/p>\n
He added that the Treasury\u2019s focus on the gross cost of pension tax relief was misleading, since the system ultimately recovers tax revenues when retirees draw income.<\/p>\n
\u201cThis tax deferral system is the bedrock of retirement provision in the UK. It helps people save for later life, reduces dependence on the state and smooths tax revenues in an ageing population. None of that can be captured by viewing the issue solely through the lens of cost,\u201d he said.<\/p>\n
Selby also questioned whether the Pensions Commission\u2019s remit extends to reviewing tax incentives, arguing that its focus should instead be on addressing pension adequacy.<\/p>\n
\u201cNowhere in the terms of reference has government specifically indicated that the Commission should review pension tax incentives. Its focus should be on ensuring everyone has enough to fund a decent retirement, particularly under-savers such as the self-employed,\u201d he said.<\/p>\n
He warned that any move to change the rules of pension saving could erode trust and deter people from investing for the future.<\/p>\n
\u201cFundamentally changing the terms under which people can access their own money threatens to undermine confidence in long-term saving and damage public faith that governments can be trusted to keep their end of the bargain when people sacrifice income today to provide for their future.\u201d<\/p>\n
AJ Bell said it will continue to campaign for a formal Pension Tax Lock, arguing that clear and stable tax rules are essential to encourage long-term retirement saving.<\/p>\n","protected":false},"excerpt":{"rendered":"The UK government has declined to back AJ Bell\u2019s call for a Pension Tax Lock, which seeks to…\n","protected":false},"author":2,"featured_media":523846,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-523845","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-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115427208312643007","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/523845","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=523845"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/523845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/523846"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=523845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=523845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=523845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}