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Senior minister rules out pension tax relief reform (for now)

David Gauke says there will be no “fundamental” changes to pension tax relief in the near future, but leaves the door open for reform later

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The new work and pensions secretary David Gauke says now it is not the time to push through a “fundamental” overhaul of pension tax relief given the fragile state of the Government.

Gauke, a former Treasury financial secretary and chief secretary to the Treasury, took over as work and pensions secretary following the election. He replaced Damian Green, who became first secretary of state.

The Financial Times reports Gauke said the Treasury and the Department for Work and Pensions recognised there was a need to “think about the long-term challenges” of the costs of pension tax relief.

The Brexit and pensions fallout of a hung parliamentBut speaking at the Association of British Insurers long-term savings conference in London yesterday, Gauke said: “I wouldn’t see any fundamental changes in the near future.

“The idea of reforming pension tax relief in the previous parliament was somewhat daunting and recent events haven’t changed that.”

Yet he suggested reform may be revisited if there was widespread support for such a move.

He said: “I am not going to shy away from the fact that getting legislation through the House of Commons would be challenging now.

“But that does give us an opportunity to now think about long-term reform, and to try and build a consensus. This is not a time to rush through an announcement then go to legislation in a short time.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Neil MacGillivray 5th July 2017 at 10:20 am

    Hoorah! Some clarity at last on the matter.

  2. What about the £4k annual allowance limit?

  3. Reform of Pension tax relief is urgent. Money pours out the backdoor of the Treasury because those with the deepest pockets benefit most. The principle of tax relief is sound to enable people to prepare for the future. A flat rate would still benefit those who can contribute more. But making the system fairer would be a start. There are bucket loads of Magic Money. Watch
    https://youtu.be/EynaoC3vgp8

    • Except, Russell, by far the largest proportion of tax relief goes to companies with DB Schemes, as they pour contributions into them to try and plug the artificially created deficits as a result of QE!
      Most HNW individuals (and their employers) are seeing their pension contributions limited to £10k due to Tapering, or nil as a result of Lifetime Allowance issues.
      Expect the results of these policies to be very apparent in the figures within a year or two.

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