UK Chancellor Targets Pension Tax Relief in Budget Move
Chancellor Reeves is set to overhaul pension contribution tax relief in the upcoming Budget, aiming to generate £2 billion annually for Treasury coffers. The plan WOULD scale back tax perks for both employers and employees—a move critics argue penalizes responsible savers and risks destabilizing workplace pension schemes.
While Reeves has spared tax-free lump sum withdrawals after backlash, her focus now shifts to salary sacrifice arrangements. The proposed changes come alongside reported deliberations on a 2p income tax rise paired with national insurance cuts—a stark departure from Labour's manifesto pledges.
Deputy leader Lucy Powell warns such policy reversals could erode voter trust. Economists counter that sluggish growth and mounting debt leave few alternatives to either tax hikes or abandoning fiscal targets. The Chancellor walks a tightrope between revenue needs and retirement security concerns.
