Tax rises were expected, and there was abundant speculation that some would alter the tax treatment of income saved through pensions. The Government has now indicated that one commonly proposed change—ending 40% tax relief on pension contributions—is unlikely. Other options were left on the table, though not everything that was talked about happened.
Before the Budget, our Looking Ahead series examined how income saved for retirement through a pension is taxed and explored why changing it is “easier said than done.” We also looked at changes the Chancellor might have considered, from tax relief when money goes into a pension to tax-free lump sums on the way out, from National Insurance relief to taxes on bequeathed pots.
After the Budget, we added our take on the measures that have been proposed below.
Glyn Bradley is a Director in WTW’s Pensions Technical Unit with over 20 years’ experience working with a broad range of pension schemes. A Budget Day veteran, for the last 15 years he has specialised in technical and regulatory matters, including HMRC rules, contracting-out, and Collective Defined Contribution. Through his work for the Chartered Institute of Taxation he is often in direct contact with HMRC, and is a regular attendee at its Pensions Industry Stakeholder Forum and inheritance tax workshops. An actuary by training, Glyn Bradley is the current chair of the Institute and Faculty of Actuaries’ Pensions Board.
