Now it doesn’t take a rocket scientist to realise that with the UK debt to GDP ratio surpassing 100%, the widely praised (so far) Chancellor of the Exchequer Mr Sunak now has a battle on his hands to reign in not only the spending but work out how this is to be repaid. In short, we expect tax increases and an easy win would be to “attack the pensions”!
Why pensions? After all if people don’t save then in a few years-time we get millions of poor pensioners but the facts are:
- When you put money into a pension, the Government does also at your highest rate (up to 45%%). Reducing this, perhaps to a flat rate is widely touted as an easy win!
- Billions of £’s are tied up in pensions, as you can’t get the money until your atleast 55 and it is difficult to move it – therefore a “sitting duck” for desperate times. A “small” annual charge (say 0.25% for example) could raise a fortune!
- When withdrawing your pension, you do not pay National Insurance. Bear in mind the rate is 12%, that’s a lot of tax going begging! Perhaps an additional 5% tax on pension income?
Who knows what will happen – but some pensions change is certain – all eyes now turn to the Autumn statement to see what is announced! As always, your local experts will take account of any tax changes and ensure all our clients maximise their return and ensure their very own Financial Fortress!