Rachel Reeves could target PENSIONS in budget – ‘It is definitely an option’
Political correspondent at the Financial Times, Anna Gross has warned workers that their pensions could take a hit in the Autumn Budget.
The change rumoured could involve charging employers National Insurance on their pension contributions.
This would effectively end the current exemption and could raise up to £23 billion for the Treasury, according to government calculation.
Speaking to GB News, Gross said: “I think it’s definitely an option that’s on the table, and it’s something that her team have looked at.
“I don’t think it’s quite clear yet whether that is going to be what’s selected. I think the other area is that’s very likely to be targeted at this point.
“There’s a huge amount of speculation that the capital gains tax could be brought more in line with income tax.
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“But yeah, there are a raft of things on the table and she’s obviously hemmed herself in.
“She’s not able to increase Income tax or National Insurance contributions.
“And so she’s looking for it for other places where she can raise that capital.”
Sir Steve Webb, a former pensions minister, suggested to The Times that while this approach might appeal to Reeves as it could be swiftly implemented without immediately affecting employees, it could lead employers to reduce pension payments, impacting workers’ future retirement funds.
The potential pension changes contrast sharply with Rachel Reeves’ previous statements.
In an interview with GB News’ Political Editor Christopher Hope before the general election, Reeves insisted she would not “put pensioners’ finances in peril” or “play fast and loose with the public finances”.
She also pledged that income tax and National Insurance wouldn’t increase under a Labour government. Reeves stated: “I want taxes on working people to be lower, but I’m not going to make commitments without saying where the money is going to come from.”
However, since Labour came to power in July, the Chancellor has already announced means-testing for the Winter Fuel Payment.
The government now cites a “£22billion black hole” in public finances, potentially necessitating tax increases in the October budget.
This shift in stance has raised questions about Labour’s pre-election promises versus their current fiscal considerations.