The UK’s government has refused to commit to a so-called ‘pensions tax lock’ following a petition launched by AJ Bell, backed by over 22,000 signatories.
AJ Bell launched a petition calling for the government to commit to retaining key pension tax incentives and ending speculation over the future of pension tax-free cash and tax relief.
But in a public response this week, the government said said it would not commit to such a pledge.
It said: “The government keeps all aspects of the tax system under review as part of the annual Budget process, and in the context of the wider public finances, and does not intend to introduce a pensions tax lock.”
Tom Selby, director of public policy at AJ Bell, said in response to the update: “Despite two bites at the cherry, after fellow MPs rejected the Treasury’s first attempt to dodge the question, Rachel Reeves [UK chancellor] has comprehensively failed to deliver much-needed certainty for pension savers by rejecting calls to commit to a pension tax lock.
“The government says it wants to ‘encourage pension saving’ and insists it understands the need for ‘promoting confidence in pension saving’, but in the same breath reveals the blatant contradiction in its own thinking by declining to end speculation that damages confidence in the system. ”
He highlighted that the recent Autumn Budget was “one of the leakiest in living memory” which “created the conditions for rampant speculation”, potentially damaging people’s finances.
“It is now knowingly turning a blind eye to the consequences and refusing to do anything to address it, leaving people in limbo once again,” he said.
“A commitment to pension stability would encourage retirement saving, giving people certainty government won’t foist extra income tax on their savings – either by curbing tax relief on contributions or reducing tax-free cash at retirement.”
