Latest news with #MelStride
Spectator
2 days ago
- Business
- Spectator
Will the economy save the Tories?
This week Dominic Cummings said the Tories may have 'crossed the event horizon'. He was trying to find a tech bro way of saying the game is up: they're finished as an electoral force and it's only Labour, Reform and the Lib Dems still in play. But might the Tories have one last chance? If they do, that chance will come from the economy. Next week the shadow chancellor, Mel Stride, will try to make the case for the Tories being the party of economic responsibility in a keynote speech to the Royal Society for Arts, Manufactures and Commerce. 'Our country faces significant and increasing challenges both at home and abroad,' he will say. 'Challenges that will require a far stronger economy if they are to be met. An economy that can only be delivered through a radical rewiring.' This won't be a speech announcing new policies, a Conservative source tells me, but will instead set out 'the direction of travel, in stark contrast to Farage's fantasy economics'.
Yahoo
3 days ago
- Business
- Yahoo
Labour accused of unleashing ‘stealth tax' on pensions
Labour is preparing to unleash a 'stealth tax' on pensions, critics have warned. The new Pension Schemes Bill will give the Government the power to force pension funds to invest in British assets to help spark growth. Yet critics of the reform argue the change, laid out in the Treasury's Pensions Investment Review published Thursday, risks lower returns for savers. Pension industry experts also called into question government claims that the package of reforms could leave retirement savers £6,000 better off. Tory MP Neil O'Brien called the plans 'a massive stealth tax' and said pension savers will 'get lower returns' so the Government can reduce its borrowing costs. Mel Stride, the shadow chancellor, said the move was an extraordinary overreach. He said: 'Labour is crossing the Rubicon into directing the public's savings. Pension pots are there to secure retirements, not to bankroll a government.' Last month major pension providers said they would voluntarily commit to investing 5pc of their total funds into UK assets by 2030. However, the new reserve power would go further and mandate how much of savers' money needs to go into UK plc. Experts within the industry have also thrown scorn on the plans. Tom Selby, director of public policy at AJ Bell, said the move 'puts a gun to schemes' heads and will create those mandatory targets in all-but-name'. Laura Myers, partner and head of DC pensions at consultancy LCP, said the threat of the Government telling trustees how they should invest was 'a step too far' that 'risks losing sight of the primacy of member interests'. James Carter, of investment firm Fidelity International, labelled the power to direct pension scheme investments in the future 'a concern'. Publication of the review follows the news this week that HM Revenue and Customs is exploring plans to tax pension contributions made via salary sacrifice work schemes. If implemented the changes would 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 Government has said that the changes within the new review will result in an additional £6,000 on average being added to an individual's pension pot over a lifetime of saving, as revealed by the Telegraph. However, Sir Steve Webb, a former pensions minister and now a partner at LCP, has said he would not 'put any weight' on the figure. He said that while lower cost pensions due to reforms could see savers add to their pots, the increase will only be marginal and there is a risk that costs actually rise, adding: 'Even the assertion that there will be overall cost savings is far from obvious.' Mr Selby added: '£6,000 isn't exactly a big potential 'gain' over the course of a retirement in return for the extra risk that is likely to be taken on. Entirely possible the gains will be higher but they could also be lower.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
3 days ago
- Business
- Yahoo
Labour accused of unleashing ‘stealth tax' on pensions
Labour is preparing to unleash a 'stealth tax' on pensions, critics have warned. The new Pension Schemes Bill will give the Government the power to force pension funds to invest in British assets to help spark growth. Yet critics of the reform argue the change, laid out in the Treasury's Pensions Investment Review published Thursday, risks lower returns for savers. Pension industry experts also called into question government claims that the package of reforms could leave retirement savers £6,000 better off. Tory MP Neil O'Brien called the plans 'a massive stealth tax' and said pension savers will 'get lower returns' so the Government can reduce its borrowing costs. Shadow chancellor Mel Stride said the move was an extraordinary overreach. He said: 'Labour is crossing the Rubicon into directing the public's savings. Pension pots are there to secure retirements, not to bankroll a government.' Last month major pension providers said they would voluntarily commit to investing 5pc of their total funds into UK assets by 2030. However, the new reserve power would go further and mandate how much of savers' money needs to go into UK plc. Experts within the industry have also thrown scorn on the plans. Tom Selby, director of public policy at AJ Bell, said the move 'puts a gun to schemes' heads and will create those mandatory targets in all-but-name'. Laura Myers, partner and head of DC pensions at consultancy LCP, said the threat of the Government telling trustees how they should invest was 'a step too far' that 'risks losing sight of the primacy of member interests'. James Carter, of investment firm Fidelity International, labelled the power to direct pension scheme investments in the future 'a concern'. Publication of the review follows the news this week that HM Revenue and Customs is exploring plans to tax pension contributions made via salary sacrifice work schemes. If implemented the changes would 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 Government has said that the changes within the new review will result in an additional £6,000 on average being added to an individual's pension pot over a lifetime of saving, as revealed by the Telegraph. However, Sir Steve Webb, a former pensions minister and now a partner at LCP, has said he would not 'put any weight' on the figure. He said that while lower cost pensions due to reforms could see savers add to their pots, the increase will only be marginal and there is a risk that costs actually rise, adding: 'Even the assertion that there will be overall cost savings is far from obvious.' Mr Selby added: '£6,000 isn't exactly a big potential 'gain' over the course of a retirement in return for the extra risk that is likely to be taken on. Entirely possible the gains will be higher but they could also be lower.'
Telegraph
3 days ago
- Business
- Telegraph
Labour accused of unleashing ‘stealth tax' on pensions
Labour is preparing to unleash a 'stealth tax' on pensions, critics have warned. The new Pension Schemes Bill will give the Government the power to force pension funds to invest in British assets to help spark growth. Yet critics of the reform argue the change, laid out in the Treasury's Pensions Investment Review published Thursday, risks lower returns for savers. Pension industry experts also called into question government claims that the package of reforms could leave retirement savers £6,000 better off. Tory MP Neil O'Brien called the plans 'a massive stealth tax' and said pension savers will 'get lower returns' so the Government can reduce its borrowing costs. Shadow chancellor Mel Stride said the move was an extraordinary overreach. He said: 'Labour is crossing the Rubicon into directing the public's savings. Pension pots are there to secure retirements, not to bankroll a government.' Last month major pension providers said they would voluntarily commit to investing 5pc of their total funds into UK assets by 2030. However, the new reserve power would go further and mandate how much of savers' money needs to go into UK plc. Experts within the industry have also thrown scorn on the plans. Tom Selby, director of public policy at AJ Bell, said the move 'puts a gun to schemes' heads and will create those mandatory targets in all-but-name'. Laura Myers, partner and head of DC pensions at consultancy LCP, said the threat of the Government telling trustees how they should invest was 'a step too far' that 'risks losing sight of the primacy of member interests'. James Carter, of investment firm Fidelity International, labelled the power to direct pension scheme investments in the future 'a concern'. pension contributions made via salary sacrifice work schemes. If implemented the changes would 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 Government has said that the changes within the new review will result in an additional £6,000 on average being added to an individual's pension pot over a lifetime of saving, as revealed by the Telegraph. However, Sir Steve Webb, a former pensions minister and now a partner at LCP, has said he would not 'put any weight' on the figure. He said that while lower cost pensions due to reforms could see savers add to their pots, the increase will only be marginal and there is a risk that costs actually rise, adding: 'Even the assertion that there will be overall cost savings is far from obvious.' Mr Selby added: '£6,000 isn't exactly a big potential 'gain' over the course of a retirement in return for the extra risk that is likely to be taken on. Entirely possible the gains will be higher but they could also be lower.'
Yahoo
3 days ago
- Business
- Yahoo
Revealed: how much the highest earners pay towards Britain's benefits bill
Britain's ballooning welfare state bill is costing the top 10pc of earners at least £6,281 a year each, Telegraph analysis shows. Almost a third of all income tax revenue and National Insurance contributions are being spent servicing the nation's benefits bill. Welfare spending totalled £296bn in 2023-24, the last year for available data, an increase of £86bn compared to a decade ago. Analysis by The Telegraph shows a worker earning £72,150 a year, equivalent to being in the top 10pc of earners, pays £19,746 in income tax and National Insurance. Of this, £6,281 – or 32pc – is spent on welfare benefits. The majority (£2,553) goes towards the state pension and other old-age benefits. But a similar amount (£2,247) is spent on unemployment benefits in the form of Universal Credit and disability benefits such as Personal Independence Payments (PIP). PIP is the main non-means-tested benefit for those with health conditions or disabilities, with payments of up to £9,500 a year to help people with living costs and getting around. However, the cost of the benefit has spiralled since lockdown, and is on course to climb from £15bn in 2019-20 to £36bn in real terms by the end of the current Parliament. Mel Stride, the shadow chancellor, told The Telegraph: 'Our welfare system is on a path to becoming completely unsustainable and Labour are asleep at the wheel. Since the pandemic we've seen a particularly steep rise in the numbers of people on benefits for health problems or disabilities, and it is set to continue spiralling higher still. 'We need fundamental reform to get the bill down and move people off welfare and into jobs. Without radical action the burden on taxpayers will only continue to rise.' The Telegraph's data relates to spending made in the 2023-24 financial year based on analysis by the Institute for Fiscal Studies. It also found the median full-time worker, earning £38,000 a year, pays £2,265 in taxes towards benefits. Their taxes contribute a further £1,455 towards the NHS and £817 is spent paying off the interest on the Government's £2.7 trillion worth of debt. For an additional rate taxpayer earning £125,140 a year, almost £15,000 (£14,960) of their income goes towards the welfare state and £10,000 (£9,608) is spent on the NHS. The Office for Budget Responsibility has forecasted welfare spending will total £378bn by the end of the decade. However, this calculation was made prior to Sir Keir Starmer's £5bn about-turn last week when he decided to reinstate the winter fuel allowance for most pensioners amid growing anger from his backbench MPs and Labour's dismal performance in this month's local elections. Reinstating the pensioner benefit will cost the Treasury £1.5bn. The Prime Minister is also considering axing the two-child benefit cap, which would cost the Treasury another £3.5bn. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
