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IFS budget deficit warning and pensions

The IFS has today published research showing the Chancellor faces a £25 billion deterioration in the UK’s finances since the last Budget.

Does this have any implications for pensions policy?

Tom McPhail, Head of retirement policy, Hargreaves Lansdown:

"The previous Chancellor took a good long look at pensions taxation, before eventually leaving the system largely unchanged and launching the Lifetime ISA instead. We don’t think Philip Hammond will make any substantial changes to pensions in the Autumn statement, however any pressure on economic growth and tax receipts is likely to aggravate the risk of him choosing to revisit the tax exemptions on pensions as a cost-cutting measure. In the longer term, further changes to pension taxation look inevitable so investors should make hay while the sun continues to shine."

Tax breaks on pensions are currently worth £48 billion a year, comprising £34.2 billion in tax relief on contributions and investment growth and £13.8 billion in NI relief on employer contributions.


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