The People’s Pension responds to the Spring Budget 2020
Commenting on the Chancellor’s announcement to increase the tapered annual allowance by £90,000 to £200,000, Gregg McClymont, director of policy at The People’s Pension and a former shadow pensions minister, said:
“Pensions tax relief needs reform and simplification. While we understand the need to support hard working senior doctors, the huge hike of the tax taper threshold by the Chancellor helps only a small, part of the working population – high earners – but does nothing for millions of basic rate taxpayers workers who would have benefited from comprehensive reform of pension tax relief rather than more tinkering.
“Two-thirds of the total tax relief paid out by the government already goes to higher rates taxpayers; a universal flat rate relief of 30 per cent would help those most in need to increase their retirement savings. A comprehensive review of this incredibly complicated system, under the remit of an independent Pensions Commission, could begin the process of reform.
“The Government’s announcement that they intend to review the ‘net pay anomaly’ – meaning that 1.7 million of the lowest earners miss out on tax relief due to a quirk – is a welcome step, but it needs to move quickly.”
Notes to editors:
The People’s Pension is the second largest master trust (multi-employer pension scheme) in the UK, with almost five million members and more than 90,000 employers signed up (correct as of 11 March 2020).