In the second episode of Money Marketing’s new series of regular podcasts, pensions reporter Sam Brodbeck and Eversheds senior associate Tim Smith pick apart the Government’s plans for pensions tax relief.
Chancellor George Osborne has fired the starting gun on proposals that could see the whole pensions tax system flipped on its head.
In his summer Budget speech Osborne said he was “open to further radical change”, adding that “pensions could be like Isas – you pay in from taxed income and it is tax-free when you take it out and in between it receives a top-up from the Government”.
But there are fears defined benefit schemes could be forced to close if the current exempt-exempt-taxed model is switched to taxed-exempt-exempt.
Auto-enrolment could also be complicated as well as the European Commission’s plan to create standards for pan-European pension products.
Experts also fear the Chancellor has already made up his mind and the consultation could be merely be an attempt to appease an industry already reeling from major reforms.