Warning to retirees as Reeves’ tax war set to hit pension relief | UK | News

Pensioners were warned that Rachel Reeves could come after a tax reduction on retirement contributions to fill the budget black hole. Currently, it does not have to pay 40% tax on pension funds of higher -rate winners, and basic rates of taxpayers get rid of 20%. However, if the chancellor reduces his pension to the basic income tax rate, all of them may change.

Economists have announced that it would bring £ 15 billion for the government a year, but that it could bring twice the burden on retirees paying income tax in pension. There are also concerns that they are already struggling to support a comfortable lifestyle with the savings of retirees, and reducing retirement will only contribute to this pressure.

He swim and ultimately rejected last year’s budget, but Ms. Reeves was before without having to find an amazing £ 30 billion for public finance.

There are also questions about the future of the triple lock and that state retirement does not pass by inflation or wage increases.

This predicts that after the Budget Responsibility Office, the cost of the triple lock will be three times higher than the original prediction at the end of ten years.

However, the plan can be protected by reducing the retirement assistance that will enable the government to secure vital funds without a major revision.

Amy Knight, a personal finance specialist and business commentator in Nerdwallet UK, announced that workplace pension plans can be adjusted to keep the triple lock in place.

He said: “An approach that the government can take into account is to offer less generous tax reduction in the workplace pension plans and to ask employers to create a deficiency.

“If companies have to increase their contributions, the amount of tax reduction can be reduced without shrinking the pension.