Government to respond to AJ Bell Pension Tax Lock proposal as petition hits 13,000 signatures

Government will be forced to respond to demands for a Pension Tax Lock, after a parliamentary petition launched by AJ Bell reached more than 10,000 signatures in less than two weeks.

The petition, launched at the start of October, calls on Chancellor Rachel Reeves to make a public commitment to protect the tax incentives which form the cornerstone of retirement saving in the UK – tax relief and tax-free cash.

The fact the petition surged past the 10,000-mark required for a formal response so quickly illustrates the widespread concern over rumours concerning pension tax reform, which have been allowed to develop in the absence of a firm commitment to pension tax stability.

AJ Bell believes the government should commit to retaining both pension tax relief and tax-free cash, two key incentives that underpin retirement planning, in their current form for at least the rest of this parliament.

Ending speculation over possible reform, particularly in relation to tax-free cash, would allow savers to plan with confidence. The commitment to a Pension Tax Lock also creates a policy position which any future government would be expected to retain.

AJ Bell director of public policy, Tom Selby, says:

“Pension savers across the UK have sent a clear message to the Chancellor: we need a firm commitment to a Pension Tax Lock to allow people to plan ahead with certainty.

“Now the government must step up and deliver their end of the bargain with a public pledge not to tinker with the cornerstone of long-term retirement planning.

“This government insists it is on the side of those who work hard and said on winning power that delivering stability was at the heart of its agenda. Now is the time to show it really means that. Anyone sacrificing take home pay today to save for the future deserves a concrete promise from the government that they will have the right to access their pension on the same terms as the generation that came before them.”