Potential Pension Cuts in the Budget
Chancellor Rachel Reeves may target pensions in the upcoming Budget by cutting the annual pension contribution limit, according to speculation from financial professionals.
Sean McCann, a financial planner at NFU Mutual, has identified four possible ways Reeves could reform pensions, noting that almost 70% of pension tax relief benefits higher-rate and additional-rate taxpayers.
- Lowering the pension contribution cap from £60,000 to £25,000, which would primarily affect 40% and 45% taxpayers.
This change has the advantage of being simple to introduce from an administrative perspective.
Author's summary: Chancellor Rachel Reeves may cut pension contributions in the Budget.