ACA urges government to avoid pensions ‘own goal’ in Budget
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It would be an ‘own goal’ if the government makes tax changes that worsen the adequacy of retirement incomes which the Pensions Review is planning to address, the chair of the Association of Consulting Actuaries has said ahead of next week’s Budget.
The ACA said the Budget, set for 30 October, will test the new government’s seriousness about improving pension outcomes.
It is widely expected that chancellor Rachel Reeves will look to pensions for increasing the Treasury’s revenue as she is looking to fill a ‘black hole’ in the country’s finances. There has been speculation the government could impose national insurance on employer pension contributions, which could lead companies to reduce contribution rates among others.
ACA chair Stewart Hastie said it feels “inevitable” there would be likely adverse changes to the tax treatment of pensions contributions or retirement benefits as part of the Budget.
“As per the representations we have made to the Treasury, our principal call is that this must be done cognisant of the consequences and challenges and with proper consultation of industry,” he said.
Hastie also warned of a media frenzy that could damage saver confidence, saying the government faced the “key challenge of ensuring the media narrative doesn’t run away with them on this – saver confidence can be as easily undermined by perceptions, as much as the policy changes themselves”.
He added: “It would be an ‘own goal’ for tax changes to worsen the savings adequacy challenge that current and future generations already face, and that the second stage of the government’s Pensions Review is seeking to address.”
Which pension tax changes would affect retirement outcomes most?
