How the UK election could impact pensions
By Kirsten Hastings, 31 May 17
What looked like a sure thing when UK prime minister Theresa May called the snap election back in mid-April has turned somewhat muddy. Aegon pensions director Steven Cameron has taken a look at what the parties’ manifestos mean for pensions.
Only the Liberal Democrats made any direct reference to pension tax relief, repeating their previous commitment to move to a flat rate of relief, ‘somewhere above the basic rate’ for everyone.
However, the Labour proposal to introduce a higher income tax rate for those earning over £80,000 ($102,714, €92,081) a year could have a number of as yet unknown implications for private pensions. Individuals currently receive pension tax relief at their highest rate.
But offering 45% or 50% tax relief to a larger number of ‘higher earners’ doesn’t fit well with Labour’s broader intentions. Those earning above £80,000 could also find they have their ‘annual allowance’ further restricted which could prove very damaging for their future retirement prospects.
“As with so many aspects of government policy, any change here will increase the need for advice, including how to avoid paying more in income tax by boosting pension contributions,” Cameron said.
