- The majority of Brits would support a government commitment to a Pensions Tax Lock, new AJ Bell research reveals*
- AJ Bell CEO Michael Summersgill wrote to Chancellor Rachel Reeves ahead of the Budget calling for a firm commitment not to alter pension tax relief or tax-free cash entitlements
- A third of Brits say rumours of pensions tax changes have knocked their confidence in saving for retirement
- Some 43% of respondents backed the idea of a Pensions Tax Lock, with just 12% saying they were against the idea
- More than half (51%) of those aged 55 and over support the idea
- The remaining 45% were unsure, likely reflecting a general lack of engagement with pensions among sections of the population
Tom Selby, director of public policy at AJ Bell, comments:
“The usual rumours and speculation about possible changes to pensions tax rules has ratcheted up ahead of Rachel Reeves’ inaugural Budget, driven by warnings of a £40 billion fiscal ‘black hole’ and the financial strait jacket the government has imposed on itself regarding National Insurance, income tax and VAT.
“This has clearly been destabilising for people, with widespread reports of savers taking decisions over their pensions ahead of 30 October, in part due to fear of the impact of possible changes rather than their long-term financial goals. Our research also shows these rumours have knocked people’s confidence when saving for retirement, with a third saying they are less confident about their pensions as a result.
“The government has an opportunity next Wednesday to turn the page on weeks of negative headlines and show it is on the side of hard-working savers by making a firm commitment to a Pensions Tax Lock. Our research clearly demonstrates savers are crying out for pensions certainty so they can plan for the long term with confidence, with 43% saying they support the idea compared to just 1-in-10 who oppose it. What’s more, over half of those approaching retirement support a Pensions Tax Lock, which illustrates the need for clarity among those most likely to be affected by any changes to pensions taxation, in particular tax-free cash entitlements.
“Labour won the July election on a promise to deliver stability for millions of Brits after a turbulent period in politics. Reeves now has the opportunity to put her money where her mouth is by committing to a Pensions Tax Lock, backing those who do the right thing and save for the long term.”
*Based on a nationally and politically representative survey of 2,000 UK adults carried out on behalf of AJ Bell by Opinium between 18 and 22 October 2024.
