Following today’s Autumn Budget, including a top up to low earners in net pay arrangements, James Jones-Tinsley, Self-Invested Pensions Technical Specialist at Barnett Waddingham comments:
James Jones-Tinsley, Self-Invested Pensions Technical Specialist at Barnett Waddingham, said: “At last – the Government has seen fit to meet its 2019 manifesto commitment to resolve the pension tax relief loophole. Hidden in the little red book is the introduction of a system to make top-up payments directly to low-earning individuals saving in pension schemes using a net pay arrangement from 2024-25 onwards. This may feel like small print, but it will in fact directly support the 1.5m low-paid workers, mostly women, harmed by the tax relief discrepancy between ‘relief at source’ and ‘net pay’ workplace pension schemes, putting more money into the retirement pots of the people who need it most.
“The fact Mr Sunak did not see fit to include this in his speech betrays a wider issue though – the Government consistently fails to adequately tackle the topic of pensions. Whether this is because it is too complex, too unpalatable, or too politically divisive is unclear. However – without real reform of the Money Purchase Annual Allowance, Tapered Annual Allowance, and pension death benefits tax regime, neither the UK’s retirement dilemma or Treasury’s fiscal debt is going to be resolved.”