AJ Bell Advocates Pensions Tax Lock in UK

Chancellor Rachel Reeves is facing mounting pressure to establish a pensions 'tax lock' to provide certainty for retirement savers, as recent research from AJ Bell indicates that a significant majority of Britons support such a measure. Currently, 43% back the idea of a tax lock, with support particularly strong among those aged 55 and over, while 33% express diminished confidence in saving for retirement due to speculation about tax changes. Critics warn that proposed changes, such as capping tax-free lump sum withdrawals and imposing inheritance tax on unused pension schemes, could severely impact pension savers. Additionally, there are concerns that employers may reduce pension contributions in response to new national insurance fees. As Reeves prepares for the upcoming Budget announcement, experts suggest that committing to a pensions tax lock could bolster trust and support among workers. The situation highlights the urgent need for clarity and stability in the pension landscape amidst ongoing financial pressures.