Govt likely to target pension tax relief - deVere

It is “almost inevitable” that the government will target pension tax relief to help deal with the cost of the coronavirus pandemic, according to deVere Group founder and CEO, Nigel Green.

Green commented that higher earners were likely to be in the firing line to help government finances as further burdening businesses would be more likely to threaten jobs and the wider economy.

The chief executive said: “Many higher earners are, as a result, considering their available options, including international ones. As it’s likely the pension contribution relief for those on higher incomes will be reduced, an increasing number of people are now mulling making a larger one-off contribution before the Budget, in order to benefit from the higher tax relief whilst they still can.”

His comments come as financial advisory firm deVere Group noted that it had seen a “considerable upswing” in the amount of clients seeking to mitigate the impact of potential tax changes, highlighting that tax hikes are likely to fun Westminster’s Covid-19 response.

“We’re in highly unusual times and many higher earners are now coming to the conclusion that it is likely they will be the ones burdened to fund the gap,” said Green.

Green added that that governments should be encouraging people to save money as they “are increasingly less likely to be able to support citizens moving forward” and people are living for longer.

He concluded: “We need to urgently revitalise, promote and nurture a savings culture as a matter of priority. Successive governments’ constant shifting of the goalposts in this regard is going to have the opposite effect to this desired outcome.”

The government had planned to cut pension tax relief in the March budget, but allegedly went back on the idea in order to appease alienated Conservative Party backbenchers.

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