With pensions and their tax incentives potentially back in the spotlight ahead of the Autumn Statement, Steven Cameron, Pensions Director at Aegon, urges the Chancellor to commit to protecting long-term retirement savings from retrospective changes—offering reassurance not just to current pensioners, but to the workers of today planning for tomorrow.
Steven Cameron comments: “There’s growing concern that if the state of the nation’s finances deteriorates further, the Chancellor may need to look again in her Autumn Statement at how to balance the books. The Spring Statement made no less than 13 supportive comments about ‘working people’, suggesting the Government is prioritising support for them. However, pensioners and pension savers were offered no such words of comfort. It’s important the Government offers support where needed across all generations. Remember that today’s pensioners were yesterday’s workers.
“Ahead of last year’s Budget, there were concerns that pensions and the tax incentives they enjoy were in the Chancellor’s sights. On the day, these were left largely intact, other than unused pensions on death being brought into scope of inheritance tax from April 2027. But fears of change led to many rushing to take their tax-free lump sum from their pension sooner than they’d otherwise planned.
“To avoid fear and unhelpful speculation ahead of this Autumn’s Budget, we strongly urge the Chancellor to commit now to not make any ‘retrospective’ changes to pensions tax incentives. It would be of huge comfort if individuals knew their hard-earned pension savings won’t decrease in value after the Budget compared to the day before. Pensions are such long-term investments that individuals really do need stability and certainty that politicians won’t just ‘change the rules.
“The Chancellor may have wanted to distinguish between ‘working people’ and wealthy individuals who generate income from investments, rather than from ‘work’. The Government can rightly point to its continued commitment to the state pension triple lock which has just increased (7 April) by an above-inflation 4.1%. But looking ahead, it’s vital that those putting aside part of their earnings today to save in a pension to live off in later life know the Government will continue to support them.”
