Our pensions are no longer in safe hands

Telegraph

2 days ago

Labour's solemn election promise not to tax 'working people' has not aged well.
Rachel Reeves promptly used her first Budget to unleash a jobs tax on employers that has helped to see unemployment rise and job vacancies wither.
The Chancellor will argue that this is not a direct tax on workers' pay packets, but she will have been fully aware of the inevitable consequences: wage suppression and higher prices for consumers.
But less than a year after winning power and it seems Labour has given up all pretences that workers do not face tax rises.
This week, HM Revenue and Customs unveiled plans to explore a tax raid on pension contributions made via salary sacrifice work schemes. This would be a blatant and direct tax attack on our pay slips.
The ideas on the table could cost the average earner more than £500 a year in extra income tax and National Insurance – and whittle away their pension pot and their retirement potential.
The most unpalatable suggestion is stripping workers of both income tax and National Insurance relief on contributions. This would be nothing short of theft given retirees are now paying record amounts of income tax on their pensions and at record rates.
Also this week, Reeves pushed ahead with plans to steer pension funds into investing a proportion of their holdings into British companies, with ministers wanting the power to force funds to comply if necessary. None of this is putting the saver's interests first.
This all comes after warnings that the Chancellor could be forced to raise taxes by up to £30bn in the next Budget to fund benefit giveaways and the rising cost of borrowing. It now seems certain that pensions will be targeted again in the Autumn Budget.
It would be the latest in a long line of pension tax raids mooted by this Government.
Reeves has already unleashed an inheritance tax raid on retirement savings, and last year she was considering plans to slash the tax-free pension lump sum down to £100,000. As a rising star in the Labour Party, she also told of her ambition to reduce tax relief for higher earners and to put a lifetime cap on Isa contributions.
This is on top of Angela Rayner's demands to reinstate the pensions lifetime allowance and to force more of us to pay the highest rate of income tax.
This Government has so far proved unashamed in its entitlement to tax whatever it sees fit, but it is more worrying than that. Labour has shown a disregard for the security and confidence workers need when it comes to our retirement savings.
Ministers have been at best naive and at worst incompetent, but the overarching message is that our pensions are no longer in safe hands. The goalposts could move at any point.
Savers need incentives and assurance to put money away for retirement, and a failure to save will mean more pensioners falling back on the state. None of this meddling is helping anyone.
And the dreadful truth is that these tax raids, for which the Chancellor will deflect blame, come after public sector workers were awarded inflation-busting pay rises and bigger pensions.
The Chancellor is mollycoddling one part of Britain and exploiting another to pay for it. It's short-sighted politics at its very worst.