The government has been asked to provide a "revised response" to AJ Bell's petition for a pension tax lock, after the Petitions Committee said that the previous response did not address the request of the petition directly.

AJ Bell previously launched a petition calling on the government to commit to a ‘pension tax lock’, which would guarantee the preservation of key pension tax incentives, including tax-free cash and pension tax relief, for the duration of the current parliament.

However, the Treasury opted not to commit to such a lock in its response, instead focusing on the role of the Pensions Commission, which will ‘make recommendations to the government on the broader questions of adequacy, fairness, and sustainability’.

The Treasury is now expected to be required to share a revised response, after the Petitions Committee said that the response had not addressed the request of the petition directly.

This news was welcomed by AJ Bell, with director of public policy, Tom Selby, stating that "unsurprisingly, the committee did not believe that the government was direct enough in its response to the request for certainty on pension taxation".

Selby continued: “Given it previously indicated that the commission would take the lead on the future of the UK’s pension system, it shouldn’t be too much to ask for the chancellor to at least promise there will be no political tinkering before the commission reports.

"The purpose of the commission must surely be to avoid short-sighted political decision-making around a key pillar of the tax system, upon which people hope to build a retirement plan over decades of saving and investing.

"So it is entirely reasonable to ask the chancellor for a simple promise that she won’t meddle in pensions and will leave that work to the commission.

“That certainty, particularly in a week mired by a distinct lack of it, would at a minimum allow many people to plan for the long term and feel more confident that the government won’t move the goalposts on pensions taxation.

"But it would also likely give the government a much-needed positive headline ahead of the Budget, as well as neatly complementing Reeves’ stated aim of boosting pension adequacy and encouraging investing in the UK stock market over the long term.”

While Selby admitted that the commission will "clearly play a pivotal role in the future of the retirement savings system", he clarified that "nowhere in the terms of reference has government specifically indicated that the Commission should review pension tax incentives."

"And the commission’s focus should instead be on pension adequacy – ensuring everyone has at least enough to fund a decent retirement," he continued.

"That is best achieved by looking at boosting participation among groups with fewer savings. Ripping up the pensions tax rulebook will only damage confidence, doing nothing to help encourage people to save for the future.

“Fundamentally changing the terms under which people can access their own money, which they set aside for retirement in good faith, threatens to undermine people’s confidence in long-term saving and damage public faith that governments can be trusted to keep their end of the bargain when people sacrifice income today to provide for themselves in the future.”

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