In a departure from other Budgets and spending reviews since 2014, George Osborne barely mentioned pensions in his latest Autumn Statement.
But David Robbins, a senior consultant at Towers Watson, said some of the language he used was a cause for concern.
He said: “The Chancellor’s message that this is ‘a government that does big things’ sounds ominous for those of us who would like the Government to stick to its election promise not to propose any further changes to pensions tax relief after the latest round of cuts for high earners.”
He believes Treasury figures saying it spends almost £50 billion per year incentivising contributions into pensions - which suggest the system is unsustainable - are not correct.
He said: “That figure is only true if you attach no value at all to the tax that will subsequently be collected on pension withdrawals, if you assume that the government could tax pensioners when their ex-employers pay off deficits in final salary schemes, and if you ignore recent cuts to tax relief for high earners.”
Nigel Green, deVere Group chief executive and founder, said: “Let’s be clear: this tax raid is indeed more likely than not to take place in the near future. It can be reasonably expected that the Annual Allowance will be slashed from £40,000 to £10,000 for many higher earners and there will be hefty tax charges for anyone who goes over the threshold. If this does go ahead, which we expect it will, the move would be another example of how pensions are a victim of the government’s war on success. It’s another bloody nose for those who want to get ahead in life through hard work and prudently saving for their future.
“It punishes saving when it has never been more important to do so and as it increasingly becomes a personal responsibility. We’re all living longer, meaning savings need to last longer, debt levels are high, care and health costs are climbing, and there’s a considerable lowering of the generosity of most pensions.
David Brooks, technical director at Broadstone, said: “This one was quiet for pensions but get ready for the next one. The big news is what may be in store for next year. The absence of any anti-forestalling measures gives a chink of hope that the changes will not be too seismic.”
Andy Bell, chief executive of AJ Bell, said: “I hope the fact that the Treasury has not rushed through a response is a sign that the Government appreciates that the options being promoted on the basis of their supposed simplicity, are more complex when you look below the surface.”
Paul Latham, managing director at Octopus, said: “People planning for retirement should not forget that significant tax relief restrictions – impacting upon the annual and lifetime allowances – come into effect next year.
“We consequently expect to see demand for Venture Capital Trusts and Enterprise Investment Schemes increase on the back of today’s announcement.”
Mr Osborne told Parliament on 28 October: “We are open to consultation on the pensions taxation system at the moment. It is a completely open consultation and a genuine Green Paper, and we are receiving a lot of interesting suggestions on potential reform. “We will respond to that consultation fully in the Budget (in 2016).”